- Ankur Bansal, Partner, BlackSoil
Mumbai-based BlackSoil Realty Fund recently made its sixth investment of Rs 35 crore in two residential projects in Mumbai. The fund has invested in projects across Hyderabad and Bengaluru as well.
Ankur Bansal, Partner, Blacksoil, shares more on his funding options.
What funding options does the fund offer?
We provide structured equity or debt funding to developers. There are generally two funding options for developers: Their own funds or getting it from outside. For external funding, they can opt for NBFCs or PE funds ++ which is primarily structured debt and has been an important source of capital for developers. Blacksoil has invested around Rs 120 crore in real estate in the past two years primarily for funding four developers in Mumbai.
To which segments within the real-estate sector do you prefer lending?
We are mostly focussed on residential and not commercial. Commercial is a totally different business and it is a focus area of large fund houses where huge capital is required and their end goal is exit through REITs. We focus on residential because of its self-liquidating nature.
Innovative forms of investments are replacing plain equity. Will this help the realty sector, and how?
This really helps because a good developer gets large funding from an institution, which understands his business well and is providing customised funding. The alternative investment funds (AIF) concept, launched by SEBI, is aimed for sophisticated investors to invest in sectors such as real-estate through a manager like us.
Realty funds are known for customisation of transactions. How are you doing this?
Each transaction has to be as per the project status and its cash-flow profile. We analyse the builder completely, his track record, projects completed, architects and contractors used and target project metrics. The developer must have also delivered good projects and paid off his past loans; only then is he considered.
For companies who want to expand and diversify their business, what is your funding option? Is there a cap attached to it, and what benefits can they avail from the same?
Mainly structure debt, but we will be doing structured equity in the future. The cap attached to a fund is that they cannot invest more than 25 per cent of their corpus; that is a SEBI regulation, so that the fund diversifies its portfolio.