HDFC sets up firm to launch offshore realty fund

The HDFC Group has set up a new fund management company, HDFC Capital Advisors, to launch an offshore real estate fund, according to sources in the know.

This will be the third fund management venture for the HDFC Group, which already manages property funds under HDFC Property Fund and HDFC Asset Management Company.

HDFC Capital Advisors has already obtained the approval of the Foreign Investment Promotion Board (FIPB) to bring in $400 million, a release issued by FIPB on October 28 said.

HDFC'S PROPERTY FUNDS

• HDFC Capital Advisors, the new fund management company set up by HDFC, plans to raise offshore fund
  

 

HDFC Capital Advisors gets FIPB approval for raising $400 mn
 

HDFC Property Fund, its sister company, had raised $1.2 bn in the past
 

HDFC PMS, a unit of HDFC AMC, also raises and manages real estate funds

While there is a buzz is that Abu Dhabi Investment Authority (ADIA) has committed this money and the 11-year fund will provide long-term equity to developers and invest in affordable housing projects including buying land for the projects, an HDFC spokesperson said the information is not correct. An ADIA spokesperson said the company could not comment on rumours.

The new company will be headed by Vipul Roongta, a senior portfolio manager for real estate at HDFC Asset Management Company, sources said.

HDFC Group has one of the oldest fund managers in real estate. HDFC entered the private equity space in 2005 with HDFC Property Fund, which has raised $1.2 billion of funds in real estate till date. It is headed by K G Krishnamurthy.

HDFC Property Fund raised $375 million in April this year from investors such as Singapore’s wealth fund GIC, State General Reserve Fund of Oman, and a clutch of investors in West Asia and other countries.

HDFC AMC also manages real estate funds and it is believed to be one of the most successful fund managers in Indian real estate.

ADIA invests across two dozen asset classes and sub categories, including quoted equities, fixed income, real estate, private equity, alternatives and infrastructure.

ADIA has committed $200 million to Kotak Realty Fund to invest in Indian real estate. It has a joint venture with Hines India Real Estate, the Indian arm of US-based property investment and management firm Hines, to invest in properties across north India.