L&T Infra Finance to launch realty fund
L&T Infra's strategy is to first get into infrastructure, which offers the best opportunity, and then to the next big opportunity - real estate
Oct 09, 2014
Source : Business Standard
L&T Infra Finance

 

L&T Infra Finance Private Equity, which is in the process of raising a total of Rs 3,750 crore in an and a domestic fund, plans to launch a real estate fund, too. The first two funds will focus on assets such as power, roads and renewable energy.

The infrastructure financing non-banking financial company's latest move comes on the back of building a Rs 14,800-crore loan book in the past eight years.

In 2002-12, private spending in infrastructure was to the tune of Rs 9.3-lakh crore. On a debt-equity ratio of 70:30, currently, Rs 2.8-lakh crore worth of risk capital is at work. These assets are largely operational and form a pipeline for capital recycling through replacement of investors.

"We are overwhelmed with the opportunity there; we have a good pipeline for investments," says Suneet K Maheshwari, group executive vice-president of L& T Finance Holdings and director - L&T Infra Finance, overseeing the PE initiative.

Private fund managers usually operate in three areas - private equity, infrastructure and real estate. L&T Infra's strategy is to first get into infrastructure, which offers the best opportunity, and then to the next big opportunity - real estate.

The company plans to start the process of raising the real estate fund after the closure of first two funds. The size of the real-estate fund is still not known. For the domestic fund, it has already raised Rs 500 crore from the first round of subscribers and it is doing the second round of subscription for Rs 250 crore. After that, it wants to get into overseas fund-raising for Rs 3,000 crore. Both the funds are going to be for 10 years.

The firm has already got the core team of about a dozen members in place, which will be further increased once the fund-raising is over. "We have made two initial commitments so far. We will start doing more once we have the size of the fund in sight," says Maheshwari.

In July Piramal Enterprises committed $1 billion in a tie-up with Dutch pension fund APG Asset Management for investment in the infrastructure sector. L&T, along with other home-grown private fund managers IL&FS, and IDFC Alternatives, is looking to raise about $2.5 billion over the next six-to-eight months.

Besides, another $2.5 billion is expected to be dedicated for India out of the estimated $7.5 billion currently getting raised by global fund managers such as Morgan Stanley Infrastructure, KKR & Co and J P Morgan Chase & Co for their global infrastructure investment funds. When contacted, Morgan Stanley declined to comment.

Latest Realty News

Home buyers not fully convinced about recovery in real estate sector
Oct 09, 2014
The tents are back on the streets of Noida. An army of property brokers that sells the dream and lure of real estate has dusted out their makeshift offices, fuelled by hopes of an economic recovery
Land row: HC orders Rs 40 lakh fine for sponsored litigation
Oct 09, 2014
In an unprecedented order, the Bombay high court has ordered a Mumbai resident to shell out Rs 40 lakhs as legal costs while dismissing his application seeking to stop the allotment of a sprawling plot in Versova to a cooperative housing society and halt development by a city builder
Bangalore Become the Most Favorite Property Investment Destination for NRIs
Oct 09, 2014
The real estate market in the Bangalore city is propped up by investments from NRI’s
Muthoot Finance launches housing loan down payment product
Oct 09, 2014
Gold loan company Muthoot Finance has launched a product 'Home Down Payment Loan' to finance margin money needed to avail of home loans
Wave enters housing finance business; aims Rs 1000cr loan book size
Oct 09, 2014
Wave group, which is into liquor, realty, sugar and cinema businesses,announced its foray into the housing finance sector
DDA extends new housing scheme submission dateline to October 15
Oct 08, 2014
DDA has extended the last date of submission of application form to October 15
Global housing prices are a tale of two worlds
Oct 08, 2014
AN index tracking global property prices in 50 countries shows prices haven’t much risen over the past five years
Real estate market cold as realtors fail to woo customers this festive season
Oct 08, 2014
The festive season has failed to bring cheer to the real estate market, with builders and brokers reporting "notso-encouraging" sales over the past two weeks
Goldman exits Bangalore Four Season property
Oct 08, 2014
Global private equity major Goldman Sachs has sold its entire 73 per cent stake in City View Bangalore Properties to a JV floated by Blackstone and realty player Embassy Group
Big realty sets sights on Port City
Oct 07, 2014
The Port City's newfound status as Andhra Pradesh's largest city seems to be attracting national realtors to its shores

Latest Realty News Of State

Realty Talk's