Actis plans to launch $500-mn India-focused real estate fund this year

Actis, the UK-based fund manager, wishes to launch a $500 million (Rs 3,500 crore) India-focused real estate fund this year, said sources in the know. This would be the first India-focused real estate fund launched by any global fund manager since US-based JP Morgan raised one in 2014.

 

It would be the second fund raising by Actis after acquiring the Asian real estate portfolio of Standard Chartered Private Equity for about $700 million last year. It raised around $600 million from investors to buy the portfolio from Standard Chartered.

 

“Though Brookfield and Blackstone have raised funds for real estate, these are global funds and have an India allocation from that. Actis is doing a India-focused fund,” the sources said.

 

According to reports, US-based Blackstone is set to raise a record $20-billion global real estate fund in the first quarter of 2019, Canadian investor Brookfield Asset Management raised a $15-billion global real estate fund last month.

 

The property fund of Actis is to invest across categories, said a source. “Actis believes there is good opportunity to invest in all segments of real estate where valuations are reasonable and liquidity is challenged.” The source says Actis will not invest in logistics, as the space is overcrowded.

 

When asked, an Actis spokesperson said they do not comment on speculation. Rajeev Bairathi, managing director at Shearwater Ventures, an investment advisory, said Actis’ proposed action would be significant. “For many years, most of the global equity has flown into income-yielding assets in India. The timing for such a fund seems appropriate, as greenfield/development assets, especially in the residential sector in India, are highly leveraged and need significant equity infusion in a market that seems to have now bottomed out.”

 

Actis also  plans to set up a new company to house its operational renewable energy assets in the country, according to recent reports. It is expected to accommodate the solar energy projects of Essel Group in the new firm it plans to acquire, in a deal valued at around $600 million, the reports said, citing sources. It also plans to acquire around 200 Mw of the Shapoorji Pallonji group’s solar assets, the reports went.

 

Actis has raised $15 billion since inception and invested $7.8 billion in assets globally, a tenth of which is in real estate.

The Facts

• Actis raised $600 million to buy Asian realty portfolio of StanC
• Actis bought Asian realty of StanC PE for $ 700 million
• Actis to set up new company for solar projects
• Blackstone set to raise $ 20 billion global realty fund in Q1 2019
• Brookfield raised $15 billion global real estate fund last month