MUMBAI: Indian Property Advisors Pvt Ltd (IPAL) is planning to raise a $300-million (Rs 1,850-crore) offshore, single-city fund, which would be invested in residential projects across Mumbai. In the second round, the private equity firm would look at raising similar funds for Bangalore and Chennai.
IPAL intends to raise the fund from major economies such as the US, Europe, West Asia and South-East Asia in the next one-year period. It has already initiated discussions with institutional investors and family offices.
“This would be the first and may be the only Mumbai-focused global offshore fund. We intend to invest in residential projects, mainly slum rehabilitation and redevelopment projects in Mumbai,” Managing Partner Ramesh Jogani said in an interview.
IPAL is a one-year-old fund started by Jogani, who had quit Indiareit Fund Advisors as its Managing Director and Chief Executive Officer in September last year, and four other colleagues.
The PE firm has already invested $16 million (about Rs 85 crore) into the fund, raised from family, friends and Jogani’s personal investment. It has also begun investing in various redevelopment and slum rehabilitation projects in Mumbai suburbs of Goregaon, Bandra and Matunga, including of developer Neumec Group.
“The idea behind investing in slum or redevelopment projects is due to the low capital investment, low risk, late stage entry and consent of members (approvals) being in place,” Jogani said.
IPAL, which intends to hold on to the investments for about 3-4 years, expects internal rate of returns (a metric to gauge the profitability of investments) of 25-30 per cent.
The private equity firm is in talks with multiple developers for investing in their projects, he said, declining to name them before formal announcements.