BANGALORE: Reliance Portfolio Management Services, a part of the Anil Dhirubhai Ambani Group-owned Reliance Capital, plans to launch its maiden realty-focused fund by end-2012, with commitments of Rs 1,000 crore. The new fund, Reliance India Realty Opportunities LLP, will invest only in residential real estate and has identified the Mumbai, Delhi, Bangalore, Pune and Chennai property markets as its prime investment destinations, according to a person with direct knowledge of the fund raising plans.
The fund will act as a bridge financier for projects which have been stalled due to a shortfall of capital, with the average investment ticket size estimated at Rs 100 crore. Reliance ADA is expected to be one of the anchor investors in the fund that will target internal rate of returns between 18% and 22%, according to the same person.
Both the Reliance ADA Group and Shahzad Madon, head-PMS and Alternate Assets, Reliance Portfolio Management Services, did not reply to email queries.
The new fund will have a hybrid structure and will provide both debt and equity to the projects it invests in.
In August, ET reported that Reliance PMS planned to raise over Rs 1,500 crore from the domestic market to invest in real estate projects around the country.
However, given the lack of investor interest, driven down by the lack of opportunities in the domestic property markets, the company has had to scale down the size of the fund. There have been 29 real estate investments estimated at $1.04 billion (Rs 5,500 crore) this year, a 72 per cent drop in cumulative deal value from 2011, which saw 87 deals worth $3.9 billion, according to research firm Venture Intelligence.
Source: http://timesofindia.indiatimes.com/business/india-business/Reliance-Capital-plans-Rs-1k-crore-realty-focused-fund/articleshow/16650719.cms
