Piramal's PE arm focuses on returns

Despite a change at the helm, the Ajay Piramal-owned realty private equity (PE) firm Indiareit Advisors’ fund-raising process is on track and the company is focusing on returns to investors. It plans to exit 12 of its investments in a year.

Following the exit of Ramesh Jogani as managing director and chief executive, Khushru Jijina, managing director of Piramal Realty, has been given the additional responsibility of managing Indiareit’s operations.

Indiareit Advisors has about Rs 4,900 crore of assets under management.

Chairman Ajay Piramal said, “Our fund-raising plans are very much on track. We are closing our Mumbai Redevelopment Fund this week by raising Rs 400 crore. Like any other PE fund, our priority is returns for our investors. We have already started distributing the returns from two of our previous funds.”

Earlier, Jogani and Jasmeet Chhabra, director of investments, had quit the company. Jogani, who joined Indiareit about seven years earlier, helped the firm raise about Rs 2,500 crore through four funds launched since 2006. He is reportedly setting up his own PE fund.

Piramal said, “Though Jogani has left Indiareit, the whole team continues to be with us. All investors are happy and there is no concern on his exit. Our latest fund is still open and though people have the option to pull out, no investor has pulled back his money….There is no emergency to hire someone as a replacement. In a few months, we’ll start scouting,” he added.

Indiareit has returned 63 per cent of the investments from its Rs 430-crore Domestic Fund I. The fund made 12 investments worth Rs 382 crore in projects such as Alpha City, Chennai (Rs 24 crore), Signature Island, Mumbai (Rs 63 crore) SSPDL Retreat, Bangalore (Rs 21 crore), Neptune, Mumbai (Rs 29 crore) and Samira I, Mumbai (Rs 17 crore).

While Domestic Fund III made eight investments worth Rs 571 crore in residential projects in Mumbai, Bangalore and Hyderabad, the Rs 901-crore Fund IV invested Rs 586 crore in five residential projects across Mumbai, Gurgaon and Bangalore. So far, Fund III has given 24 per cent returns to investors.

On last year’s discussions with Religare to sell Indiareit, Piramal said, “Yes, we were in the final stages of discussion. However, the board later decided not to sell the PE business at a time when the group was strengthening the whole financial services business….Currently, we don’t have any plan to sell the business.”

Earlier, Indiareit had planned to launch a $500-million offshore fund and a $200-million rental yield fund. However, according to media reports, the firm has now put the fundraising plans on the backburner. “Currently, our primary focus is returning money to investors. We will go for additional funds at the right time,” Piramal said.