COIMBATORE: IDFC Alternatives, one of the largest multi-asset class fund managers, with a corpus of Rs 14,414 crore, has announced the close of its first real estate fund -- IDFC Real Estate Yield Fund, a domestic fund focused on the residential real estate segment in the country.
Despite the slowdown in the economy, the fund has raised Rs 750 crore from domestic investors in ten weeks. The fund is targeting residential projects which are under construction across the top six cities (Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune). It is a focused debt fund with a medium term horizon and has already committed Rs 123 crore across two residential projects in Pune and Bangalore.
"This is our first real estate fund and we feel confident about its performance. The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows," said M K Sinha, managing partner & CEO, IDFC Alternatives.
"This is the right time to plough money into the sector and structure transactions that will provide high yields going forward," he said. "This fund has some key differentiators—it is a focused debt fund that targets a regular distribution of income to investors," said Ritesh Vohra, Partner - Real Estate Investments, IDFC Alternatives.
The fund would be invested in 'ongoing' residential projects to mitigate execution related risks. "It has a lower risk profile given the secured nature of underlying investments and has been designed to be an investor-friendly product," IDFC said.
The IDFC Real Estate Yield Fund will capitalize on the opportunities by focusing on debt deals that generate high yields, while ensuring downside protection and adequate security cover.
The fund aims at build a high-quality portfolio by focusing on established developers and brown-field residential projects, which will help generate superior returns for the fund's investors by employing a balanced risk-return strategy.