MUMBAI|BANGALORE: HDFC Mutual Fund plans to raise up to Rs 1,500 crore for real estate through a newly-formed category — alternative investment funds (AIF). According to two persons familiar with the matter, the asset management company will raise the money through a new division that is likely to be called HDFC AIF.
"The new division is likely to be run by the same team that is currently handling HDFC Portfolio Management Services," said one of the persons, requesting anonymity. The company, which received its licence for alternative investment funds from capital markets regulator in late 2013, will be among the first few funds to raise money under the new category. However, it has not finalised the structure and tenure of the fund. An email query sent to HDFC Mutual Fund remained unanswered until going to press.
HDFC Mutual Fund has been investing in real estate through its division HDFC Portfolio Management Services, which had raised Rs 3,800 crore in 2008 and deployed the amount in real estate projects across the country. Recently, it exited a residential project of Mumbai-based Runwal Group by selling 50 per cent in the project for Rs 250 crore.
Sebi had in May last year notified the guidelines for alternative investment funds, market intermediaries established in India with the objective of pooling in capital from Indian and foreign investors for investing according to a pre-decided policy. The minimum investment amount to be raised under this category has been raised to Rs 1 crore from the earlier threshold of Rs 5 lakh — a move aimed at differentiating between retail and long-term investors.
According to the guidelines, these funds are expected to be close-ended with a tenure of not less than three years and the maximum number of investors capped at 1,000 entities. Recently, Jones Lang LaSalle India's Segregated Funds Group closed its first real estate fund — Residential Opportunities Fund-I — at Rs 161 crore. The fund, which is also registered with Sebi as an alternate investment fund, will invest in residential projects across seven cities including Mumbai Metropolitan Region, Delhi National Capital Region, Bangalore, Chennai and Pune.