Former Indiareit MD to launch own funds

Indian Property Advisors would raise fund to be invested in Mumbai redevelopment projects across clusters in Mumbai

Ramesh Jogani, former managing director of Ajay Piramal's realty fund manager Indiareit Fund Advisors, plans to raise a Rs 300-crore domestic realty fund and a $250-300-million (Rs 1,500-1,800 crore) offshore fund by the second quarter of 2014.

Jogani-founded Indian Property Advisors (IPAL) will raise the two funds, which will invest in redevelopment projects across the clusters in Mumbai. “The rationale behind investing in slum or redevelopment projects is the low capital investment, low risk, late stage entry and approvals of members being in place,” Jogani said in a statement.

The fund intends to raise money from major economies such as the US, Europe, West Asia and South-East Asia in the next one-year period. The fund will remain invested for three-to-four years with an internal rate of return of 25 per cent depending on the market conditions.

During the year, IPAL has committed Rs 50 crore to an on-going special purpose vehicle with Neumec Group, a Mumbai-based property developer, to redevelop projects in Vile Parle, a suburb of Mumbai. It has also begun investing in various redevelopment and slum rehabilitation projects in Mumbai suburbs such as Goregaon, Bandra and Matunga. The private equity firm is also in talks with multiple developers for investing in their projects.

“Our economic indicators identify trends and inflection points to help us make better investment decisions. We are in the process of selecting the distributor and working on the collaterals. It will take nine months to a year to close the fund and the initial closing may happen in the next six months. Keeping in mind the current market scenario, IPAL expects investors to earn internal rate of returns (IRR) of more than 20 per cent,” said Jogani.