Overseas funds make a beeline to invest in India
Jun 14, 2014
Source : The Times of India


MUMBAI: Several sovereign wealth funds (SWF) and overseas pension funds are rushing to invest in India, driven by hopes of economic recovery under a new stable government. At least three sovereign funds from West Asia have invested over $5 billion in the past eight months and one global pension fund has committed to invest $450 million.

Two other funds are scouting for investments in India's real estate and infrastructure developers.

"Risk of returns are out of the way and these funds can invest capital for longer tenure," said the head of a realty fund, which has received investments from two SWFs in West Asia.

"They have lesser redemption pressure unlike private equity funds, which have to give returns to their investors in few years."

Private equity (PE) experts say a trend is visible of both SWF and pension funds investing heavily in the past six months. They say they expect to see more such investments this year.

"SWF and pension funds will be the largest investors in the next one year, while the fund of funds and PE funds will stay away after being caught in the two cycles of economic slowdown," said a senior PE fund manager, whose fund runs a distressed asset fund jointly with an American bulge bracket fund.

READ ALSO: FII inflows hit Rs 1 lakh crore mark for 2014

Abu Dhabi Investment Authority (ADIA), which had invested roughly $500 million in the past decade, has also upped the ante. Abu Dhabi power company Taqa, owned by ADIA, purchased a 51% stake in Jaypee Group's thermal power projects for $1.5 billion jointly with a Canadian pension fund and local PE IDFC Alternatives Fund.

Last year, ADIA also appointed Suresh Sadasivan as head of its internal equities department for Asia excluding Japan, responsible for developing strategy, managing risk and overseeing management of portfolios.

Oman's State General Reserve Fund, Government of Singapore Investment Corp (GIC) and Temasek committed $200 million investment in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation.

In May last year, Qatar paid $1.26 billion for a 5% stake in India's largest mobile telephony by customers Bharti Airtel.

Canadian Pension Plan Investment Board, which manages $218.1 billion of assets, formed two joint ventures in November last year.

It formed a joint venture with real estate developer Shapoorji Pallonji Group to invest in commercial real estate in India, and formed an equal real estate finance company with billionaire Ajay Piramal group's Piramal Enterprises, which will specialise in debt and structured finance. The fund committed $200 million in the first and $250 million in the second venture. "We will be deploying more and more capital to India and that is fungible.

We are constantly moving our capital, so it can't be seen as what happens to one dollar invested in one project," Mark Wiseman, president and CEO at Canada Pension Plan Investment Board, said after announcing its real estate venture. The fund opened its second office in India outside Canada after Hong Kong.

Consultants say the fund flow to India will rise as Japan allowed its $1.26 trillion pension fund to invest in alternate assets overseas.

"More PE funds will tap the Japanese market, which are negligible now," said manger of an Indian fund that runs a distressed fund with an American bulge bracket fund.

"These funds, which were investors in Indian PE funds, are now seeking to invest directly in assets with a longer tenure," said Sanjeev Krishnan, executive director, PwC, who authored his firm's private equity report released on June 10. "For longer tenure of investments, India is a better bet."


Latest Realty News

Delhi: 40% buildings don’t comply with fire safety norms
Jun 14, 2014
DELHI: Four out of 10 buildings in Delhi do not comply with the safety norms, according to fire officers. The unsafe buildings include residential and commercial complexes, schools and nursing homes. Even the playschool which caught fire on June 10 did not have a no-objection certificate (NOC), the officers said.
Noida homebuyers left in the lurch again!
Jun 14, 2014
DELHI: The recent judgment of the National Green Tribunal (NGT) prohibiting the Noida authority from giving completion certificates to projects within 10km radius of the Okhla Bird Sanctuary will affect around 20,000 buyers whose apartments have been completed and ready for delivery.
SC dismisses Noida builder’s plea against NGT order
Jun 14, 2014
DELHI: The Supreme Court on June 10 refused to entertain a plea of real estate firm Jaypee Infratech seeking a direction to Noida Authority to grant completion certificate to its projects which fall within 10km radius of a bird sanctuary.
Real estate trusts may tap Rs 90k cr in first year
Jun 14, 2014
MUMBAI: Real estate investment trusts (Reits), which are expected to get a green signal in the upcoming Budget, could open up a new source of funding for developers battling declining sales and high cost of funds.
Real estate shares on a roll; Realty index surges 6%
Jun 14, 2014
MUMBAI: Shares of real estate companies are on a roll with most of the frontline stocks trading higher by up to 17% on the bourses after President Pranab Mukherjee in his joint address to the Parliament today said that the government proposes proper housing to all citizens by 2022.
Real opportunities in real estate?
Jun 14, 2014
MUMBAI: Since May 16, the Bombay Stock Exchange's realty index has risen 32.50 per cent. The surge in real estate stocks suggest that the property market is booming again. But analysts believe that the fortunes of the sector will not change so soon. Does it mean then that before the price rise starts, buyers should jump to buy property?
Adopting Mamata’s colour code will get homeowners tax sop
Jun 14, 2014
KOLKATA: Want a property tax waiver for 2014-15? Paint your house or apartment building white-and-blue. Yes, you've read it right. The proposal, which has mayor Sovan Chatterjee's blessings, was accepted in the mayor-in-council meeting on Monday.
Pay your property tax in advance, get concession
Jun 14, 2014
THANE: The Thane Municipal Corporation (TMC) has restarted its earlier scheme of giving concessions to residents who pay property taxes in advance. Under the scheme, residents who paid the entire year's property tax in May were given a concession of 5%. Similarly, the TMC will give 4% concession to those who pay the entire year's tax by June, 3% by July and 2% in August.
1,370 km national highways to be upgraded at Rs 13,000 cr
Jun 14, 2014
BERHAMPUR: Around 1,370 km of national highways (NHs) in Odisha will be developed into four and six lanes under Phase III, IV and V under the National Highway Development Project (NHDP). The cost of upgradation of the national highways is estimated at around Rs 13,000 crore, sources said.
EOW Submits Papers for Seizure of Golden Land Developer’s Assets
Jun 14, 2014
BHUBANESWAR: The Economic Offences Wing (EOW) of the State Government on Wednesday submitted a proposal before the Finance Department seeking confiscation of the assets of Golden Land Developers Ltd which is charged in the chit fund scam.

Latest Realty News Of State

Realty Talk's