Bahrain-based alternative assets manager Investcorp has secured $130 million in anchor commitments for its new Indian residential lending platform, per an announcement.
BAE Systems Pension Funds Investment Management Limited is the cornerstone investor for this initiative, which will focus on projects in the affordable and mid-market housing segment in the top seven cities in India, Investcorp said in a statement.
“The current slowdown in the residential markets as well as in the flow of credit in India create an opportune timing for us to launch this new lending initiative, which builds upon our track record of similar credit investments in India. Affordable housing has emerged as a dominant segment, augmented by government efforts and the introduction of favourable policy reforms,” Ritesh Vohra, Partner and Head – Real Estate, Investcorp India, said.
“We believe that the Indian affordable-housing segment represents a sizeable and attractive market opportunity, catalysed by urbanisation and structural reforms. BAE Systems is pleased to make a positive contribution to the development of affordable housing in India, where there is significant demand but a lack of institutional-quality capital to fund projects,” Vikram Aggarwal, head of private markets at BAE Systems Pensions, added.
Investcorp is an active investor in the US and European real estate markets, and manages over $28 billion globally. Since inception, Investcorp has invested in more than 765 properties totaling in excess of $18 billion.
In India, the firm has deployed over $200 million through two funds across 27 residential projects located in the top tier cities. The funds provided structured senior credit to mid-market and affordable housing projects.
“Global investors are looking at the Indian real estate sector with a great deal of enthusiasm following the recent policy reforms including Real Estate Regulatory Act (RERA), 100 per cent FDI in construction and easing of REITs regulations, The reforms are helping property markets in India get more transparent, prompting institutional investors to increase their exposure in the country,” Sanjay Kohli, Principal, Investcorp London, said.
Investcorp is also active in the mid-market private equity space in India, having made five investments, in Zolo Stays, Citykart, Intergrow Brands, Bewakoof, and Nephroplus in 2019. It closed its maiden India-focused private equity (PE) fund at about $150 million last year.
Investcorp entered India earlier last year, when it acquired the private equity and real estate fund business of IDFC Alternatives. Investcorp’s maiden India fund is a top-up of IDFC Alternatives’ fourth PE fund, which managed to raised around $70 million before the acquisition by Investcorp. Investcorp is also managing the third PE fund raised by IDFC Alternatives.