Sets up AIF in partnership with IIFL Wealth Management to fund select advanced stage or last-mile projects in Tier I cities.
Piramal Group has set up an ₹2,000 crore Alternative Investment Fund in partnership with IIFL Wealth Management to fund select advanced stage or last-mile real estate projects in Tier I cities across India.
“The creation of this AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions. 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,” said Khushru Jijina, Managing Director, Piramal Capital & Housing Finance.
The fund will be used to provide capital to Tier I 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 company said in a statement.
IIFL Wealth is a wealth manager with aggregate assets of around ₹1,70,000 crore under management, advice and distribution.
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 its lending business through a new co-investment/co-origination model.
Karan Bhagat, Founder, MD & CEO, IIFL Wealth Management said, “Piramal’s deep domain expertise in real estate and IIFL Wealth’s ability to seize the best market opportunities have resulted in well-structured investment idea which will provide clients with an ideal risk-adjusted return.”
Real estate industry is faced with unprecedented liquidity crunch due to funding squeeze from NBFCs.
Last month, the central government had approved the creation of a ₹25,000 crore ‘professionally managed’ fund to boost stalled middle and low-income RERA registered housing projects that are net worth positive.
The government said it planned to invest ₹10,000 crore in this Alternative Investment Fund (AIF) while State Bank of India and LIC would provide ₹15,000 crore in total, taking the total size to ₹25,000 crore.