Piramal Group and IIFL Wealth Management have announced a co-investment on an Alternative Investment Fund (AIF) platform to fund select advance stage/last-mile, real estate projects across Tier-1 cities in India. This AIF with a target size of Rs.20 billion will be used to provide capital to Tier-1 developers in key markets. The market today presents many opportunities for last-mile finance across projects that require a minimum amount of gap funding for completion.
“The creation of this AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with like minded reputed institutions,” said Khushru Jijina, Managing Director, Piramal Capital & Housing Finance. “We will initially seed the fund with existing loans from Piramal Group’s portfolio while continuing to explore quality deals from the market in future.”
With this, Piramal will also be facilitating external capital (on a fund or co-investment basis) alongside its lending business. This will enable it to further grow the lending business through a new co-investment or co-origination model.
“Piramal’s deep domain expertise in real estate and IIFL Wealth’s ability to seize the best market opportunities have resulted in a well-structured investment idea that will provide clients an ideal risk-adjusted return,”added Karan Bhagat, Founder, Managing Director & CEO, IIFL Wealth Management.
IIFL Asset Management has raised a cumulative AUM of Rs.70 billion across eight real-estate funds to date. Of these, it has fully exited first two funds, generating gross IRRs of 18-22 per cent.
Piramal Group has a track record of both primary development and wholesale funding in real estate. It also has a fiduciary fund management business across multiple funds and mandates across structured, preferred and pure equity.
IIFL Wealth is one of the leading wealth managers in the country today, with aggregate assets of around Rs.1,700 billion under management, advice and distribution. Headquartered in Mumbai, the company has over 950 employees and a presence in six major global financial hubs and 23 locations in India.