DHFL Venture Capital in JV with Redwood for logistics

Dewan Housing Finance Corporation Ltd (DHFL) Venture Capital has entered into a joint venture with the Redwood Group - a real estate fund having investments in Europe and Asia - to raise funds for investing in logistics and warehousing.

The JV will raise approximately $150-200 million (around Rs 700-950 crore) from the international markets and an additional Rs 150-Rs 200 crore from the domestic markets. The JV will be a 50:50 partnership.

“We are still in the initial stages and are yet to decide on the structure and details of the fund. Even the domestic market is not yet conducive for raising funds. This particular fund will focus on the logistics and warehousing space,” said Arun Goel, CEO, DHFL Venture Capital.

Established in 2006, the Redwood Group has developed and acquired over $10 billion in projects in Asia and Europe.

Goel said the logistics and warehousing segment is very much fragmented in India and is perhaps at the same level as what the real-estate sector was a decade back. “We feel there is enough space for transformation. We will be focusing on firms in the metro areas,” said Goel.

For DHFL, this will be its second fund. The first fund the company raised in 2006-07 was Dream Fund-I.

The total assets under management under this fund is close to Rs 200 crore. Goel said the investment through this fund has been successful and the company has had an internal rate of return (IRR) of 33 per cent.

“We have exited from some of the invested firms and plan to redeploy the capital into new projects,” he added.

Dream Fund-I has been investing in projects that are in the commercial office space and in residential segments.