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Piramal's PE arm betting big with new funds, more exits

The PE firm which has Rs 4,900 cr of AUM is set to close its latest Mumbai Redevelopment Fund by this week

Reghu Balakrishnan  |  Mumbai 

Unperturbed by the exit of its senior executives, Ajay Piramal-owned realty PE firm Indiareit Advisors is on an expansion spree with launching new funds and about 12 exits in next one year. The PE firm which has Rs 4,900 crore of assets under management (AUM) is set to close its latest Mumbai Redevelopment Fund by this week.

In an interaction with Business Standard, Ajay Piramal, chairman, Indiareit Advisors said, "Our fundraising 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 initial priority is giving back returns to our investors. We have already started distribution of returns from our first 2 funds." According to him, Indiareit plans about 12 exits in next one year.

Indiareit had hit the headlines last week after the exits of the MD & CEO - Ramesh Jogani and director of investments - Jasmeet Chhabra.

Ramesh Jogani, who joined Indiareit about 7 years back, helped the firm to raise about Rs 2,500 crore through four funds that were launched since 2006. Jogani is reportedly setting up his own PE fund.

After Jogani's exit, Khushru Jijina, MD of Piramal Realty has been given additional responsibility of Indiareit operations.

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

Indiareit has returned 63 per cent of investments from Rs 430-crore Domestic Fund I. Fund I made 12 investments worth Rs 382 crore in projects such as Alpha City, Chennai (Rs 24 crore), Signature Island, Mumbai (Rs 63 cr) SSPDL Retreat, Bangalore (Rs 21 cr), Neptune, Mumbai (Rs 29 cr), Samira I, Off-Mumbai (Rs 17 cr ). Domestic Fund III made 8 investments worth Rs 571 crore in residential projects in Mumbai, Bangalore and Hyderabad while Rs 901-crore Fund IV Invested Rs 586 crore in 5 residential projects across Mumbai, Gurgaon and Bangalore. So far Fund III has given 24 per cent return to investors.

Admitting about the discussions held with Religare last year to sell Indiareit, Piramal said, "Yes, we were in final stages of discussion. However, the board decided later not to sell PE business at a time when the group is strengthening whole financial services business." Presently, we don’t have any plans to sell the business, he reiterated.

Indiareit has plans to launch a $500-million offshore fund and a $200-million rental yield fund. Media reports said the firm has put the fundraising plans on backburner. Piramal said, “Presently, our primary focus is returning money to investors. And we will go for additional funds at the right time.”

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First Published: Tue, September 18 2012. 17:17 IST