India: Motilal Oswal Real Estate hits first close of new fund at $86.6m

Motilal Oswal Real Estate (MORE), the realty-focused private equity arm of Motilal Oswal Financial Services Ltd, has achieved the first close of India Realty Excellence Fund V (IREF V), its fifth real estate fund. The fund, launched with a target corpus of 800 crore, has received commitments of around 650 crore.

The remaining capital will be raised over the next couple of months, the fund said on Thursday.

The new fund has been raised from high net-worth individuals (HNIs) and family offices and has been set up as an alternative investment fund (AIF Category II).

IREF V will focus on providing senior secured debt in post-approval projects and plans to deploy the capital in mid-income or affordable residential projects across the top 7 cities while selectively investing in commercial projects. IREF V would undertake 12-15 transactions over its entire fund life.

Till date, MORE through its real estate funds and PMS/NCD investments has funded 89 projects via 68 investments and exited 33 investments.

With IREF V, MORE’s cumulative assets under management (AUM) is now over 4,400 crore.

MORE is a part of Motilal Oswal Private Equity (MOPE), the alternative investments platform of Motilal Oswal Financial Services Limited.

“We believe that the realty sector is currently at an inflection point. With this fund, our cumulative private equity AUM has crossed $1 billion and real estate forms a key part of that AUM. We will continue to strengthen our position as a real estate investor by capitalizing on such diverse opportunities over years to come,” said Vishal Tulsyan, managing director and chief executive officer (CEO), MOPE.

Sharad Mittal, director and CEO of MORE said, “With this fund, we have repositioned ourselves to cater to capital requirements throughout the project lifecycle providing a complete financing solution and becoming the preferred financial partner for real estate developers. We have raised 650 crore for the fund within three months of launch.”

MORE has concluded its first investment in IREF V with Shriram Properties Ltd in Bengaluru and has a strong pipeline of deals that it is currently evaluating.

“There has been a huge gap in construction finance available in the sector over the last two years pursuant to the NBFC crisis and now the covid-19 pandemic. The real estate sector has gathered a lot of momentum during the last 6-7 months on the back of bottomed-out prices, peak affordability, historically low mortgage rates, government incentives and increasing emotional value of home-ownership during the pandemic. Several developers have clocked record sales in the last two quarters of FY021. However, liquidity is still a concern which is where this fund will help our developer partners,” Mittal added.

MORE’s fourth fund, IREF IV, which achieved its final close in 2020, is currently under deployment and has made 13 investments till date and secured one exit at an investment level internal rate of return (IRR) of 21%.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.