MUMBAI: Sanjay Grewal, IDFC's board member is joining Altico Capital, the nonbanking financial arm of Clearwater Capital. RK Narayan of Jones Lang Laalle is moving to head the $400 million real estate fund of Macquarie Group. There are more than half a dozen top-level hires in the last couple of months among real estate private equity funds.
Some of the other top level moves include Nipun Sahni who is joining the real estate investing business of Apollo as its India head and Yash Nadkarni who has joined as the managing director in-charge of real estate investing at global private equity fund KKR. Besides these moves, global funds such as Canada Pension Plan Investment Board (CPPIB), Piramal's real estate arm, Brookfield, ASK Group and US-based Hines have also either already expanded their real estate teams or have mandated head hunters to look for top-level talent.
For Canadian Pension Plan, with more than $214 billion under management, setting up an India office in Mumbai is its first step towards increasing its presence in the South-East Asian market. The management of the fund have shared their plans of investing in real estate and other asset classes in the region at various fora. Global private equity investor Warburg Pincus too said it would look at real estate in the country.
"A lot of funds are gearing up for investment opportunities in real estate in anticipation of a positive outlook of fresh funds being allocated to this asset class. Our private equity clients are keen to invest across the capital structure, especially in residential focussed projects, resulting in a healthy demand for lateral talent in the RE space" says Sonali Manek, Head of private equity hiring at Vito India, a leading executive search firm that has been associated with some of these moves.
As per a recent report by global real estate consultancy, Cushman & Wakefield on Private Equity investments in Real Estate (PERE) total inflows in the sector for Q1 2015 were Rs 5,168 crore, higher by 85 per cent from the same quarter a year ago at Rs 2,800 crore. The increase in PERE investments during first quarter of 2015 was due to improved market sentiments and higher investments in residential and commercial office assets, which increased by 158 per cent and 68 per cent respectively compared to Q1 2014.
"With improving macro-economic conditions, enabling policy environment, recovering demand, attractive valuations and increasing capital requirements of the Indian real estate sector, PE funds are likely to increase their investments in the next few years," said Sanjay Dutt, executive MD, South Asia, Cushman & Wakefield. "Residential and leased office assets will remain as favorites with PE funds as demand for funding remains strong in the residential projects and given the 35 per cent year-on-year increase in office net absorption, there is ample scope for the funds to generate high yet stable rental incomes. However, the private equity funds are likely to take only calculated risks and collaborate strictly with renowned developers to protect their investments."