Motilal Oswal launches third fund, to raise Rs 1,000 crore

Mumbai: Private equity firm Motilal Oswal Real Estate today launched its third real estate fund and plans to raise up to Rs 1,000 crore which the company proposes to invest in residential projects in six metros.

The company plans to raise up to Rs 1,000 crore fund majorly from high networth individuals (HNIs) and family offices, a statement issued here said.

"The fund shall primarily deploy capital in residential projects by established developers in Mumbai Metropolitan Region, NCR, Bangalore, Pune, Chennai and Hyderabad and will target to undertake 10-12 transactions with deal sizes ranging from Rs 80 crore to Rs 120 crore," Motilal Oswal Director and Head, Real Estate Fund Sharad Mittal said.

The fund has been set up as a SEBI registered AIF Category II Fund and has already received the requisite approval from the authorities, the statement.

"The realty sector is going through a consolidation phase and prices are expected to remain stagnant for some time. This is the correct time for investors to invest through indirect investing, as we participate in the project profits rather than banking completely on the future price rise," he said.

The second fund was closed in March 2015 and had raised Rs 500 crore. It is currently in investment mode and has deployed 80 percent of the capital, Mittal said.

"The balance capital shall be deployed in next 2?3 months. Our first fund was of Rs 200 crore raised in 2009. This fund has been fully deployed and is currently in an exit mode," he said.

The first fund has exited its four out of seven investments and has returned 82 percent of the capital with gross investment level IRR of 20 percent.