Amit Bhagat,MD & CEO, ASK Property Inv Advisors
MUMBAI: ASK Property Investment Advisors (ASK PIA), the real estate private equity arm of ASK Group, has raised Rs 1,000 crore under its third domestic fund ASK Real Estate Special Opportunities Fund II.
The fund raised from family offices and high-net worth individuals will be deployed in residential properties across six cities in India, including Mumbai, Delhi-NCR, Bengaluru, Pune, Chennai and Hyderabad. The fund, which was launched in October, is currently in the process of raising its green-shoe option ofRs 500 crore, taking the total corpus toRs 1,500 crore.
ASK is looking at deploying the fund through a total of seven to eight investments with average deal size ranging between Rs 100 crore and Rs 200 crore. The fund will also be looking for opportunities to invest in distressed value assets with strong regional developer brands. The fund will be focusing on capital conservation and sustainable risk-adjusted returns and will be aiming for returns of 2 to 2.5 times multiple.
"We have demonstrated our exit track record of close to Rs 1,000 crore with returns in the range of 2.25 to 2.5 times and this performance has helped us in receiving a good response for the new fund.
Our investors, who have invested through us as preferred partners in Indian real estate, appreciated the differentiated approach of equity over mezzanine or debts investments," said Sunil Rohokale, managing director & chief executive officer, ASK Group.
With this first close, the assets managed by the ASK Group through its real estate business stand over Rs 3,000 crore, of which the group has committedRs 1,800 crore in 16 projects spread over 18 million sq ft during the last 18 quarters.
"Almost 60% of commitment in this fund is from existing investors and that is because of our disciplined approach of investing with prudent developers in growth corridors comrebined with right entry price and risk/ asset management," said Amit Bhagat, managing director & chief executive officer, ASK Property Investment Advisors. "We are looking to conclude around 3-4 more investments by December and deploying a total of Rs 800 crore by March 2016 through new fund, offshore fund and its second domestic fund."
The fund will be focusing on pure equity investments and targeting returns of 25-27%. ASK has already started investing through this new fund.
To begin with, it has invested Rs 82.5 crore in a subsidiary of Bengaluru-based Puravankara Projects for acquisition of 31.69 acres of land in Chennai's prime location, Poonamallee, with a developmental potential of 3.3 million sq ft. While the transaction is Puravankara Group's first ever private equity partnership, for ASK this is their third investment in Chennai property market.
ASK PIA is a venture of the ASK Group set up to manage and advise real estate dedicated funds. ASK PIA had earlier raised Rs 326 crore between March 2009 and December 2009 and has committed 100% of its portfolio. It also raised second domestic fund ofRs 1,000 crore in 2011. On the offshore front, ASK Group has recently made an initial close of $50 million, or Rs 300 crore, for its $200 million fund. The company has also raised structured debt of Rs 395 crore.