The private equity arm of Indiabulls Asset Management Company (AMC) has established a new real estate fund Dual Advantage Commercial Asset fund (DACA) which is going to help the firm generate about Rs 1,500 crore from it.
This is Indiabulls AMC’s first commercial property fund backed by the amount Rs 1,500 crore raised by two of its residential real estate fund. With this, the mutual fund investment company prepared to step into the commercial property market. The new fund will have 5 years to generate the required amount with an option of two extensions of one year each. The company is going to take help from various institutional investors, HNIs and family offices.
DACA fund’s main aim to find investment opportunities in pre-leased office assets across top seven commercial markets that include Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai and Hyderabad. The target of the gross pre-tax internal rate of returns will be 16 to 17 per cent with ticket size for investment from Rs 100 crore to Rs 200 crore.
The new fund will also be raised through Alternative Investment Fund category II under the provisions of Securities & Exchange Board of India Regulations, 2012. Indiabulls AMC will be the investment manager whereas Indiabulls Group will be the sponsor of this DACA fund.
“Our commercial investment strategy intends to provide downside protection through recourse to completed asset, returns through existing rental yields and capital appreciation on exit,” says Ambar Maheshwari, CEO -Private Equity, Indiabulls Asset Management Company.
“The fund will target to achieve higher returns by implementing various strategies like the opportunity to bring rentals to market parity, repositioning asset to achieve higher rentals and innovative leverage and tax structures to plug leakages.” He adds.
Source: ET Realty