IL&FS closes realty fund at $895 mn

IL&FS Investment Managers (IIML), the private equity investment arm of Infrastructure Leasing & Financial Services (IL&FS), has announced the closure of a real estate fund at $895 million (about Rs 4,500 crore), exceeding its target of $750 million.

IL&FS India Realty Fund–II, which is the second IL&FS fund focused on the real estate sector, also exceeds the corpus of IIML’s first similar fund, which had raised $525 million from international investors in April 2006.

“We are proud to see that international investors have reiterated their confidence in IL&FS Investment Managers and the Indian realty space,” said Shahzaad Dalal, vice-chairman and managing director of IIML.

The second fund includes commitments from state pension funds, foundations, university endowments and family offices across the globe. With the fund, IIML proposes to invest in the real estate space in the country’s Tier-I and -II cities.

“The current market situation and capital scarcity provide valuable opportunities. As investors, we continue to look at investments with cautious optimism since we believe in the underlying strength of the Indian real estate market and remain confident of the long-term prospects of this sector,” said Archana Hingorani, CEO and executive director of IIML.

IIML is planning investments of $25-75 million by providing growth capital to mid-market real estate developers.

“We have partnered with some of the most reputed real estate developers as well as nurtured some of the more upcoming developers and we expect these relationships to further deepen through the second fund,” said Hingorani.

IIML has been managing private equity investments, ranging from sector-specific funds like real estate to sector-agnostic private equity funds. Since its inception in 1989, IIML had raised and managed nine funds.