Piramal Group and IIFL Wealth Management Limited have announced a co-investment on an Alternative Investment Fund (AIF) platform to fund select advance stage / last-mile real estate projects across Tier 1 cities in India. This AIF with a target size of INR 2,000 crores, will be used to provide capital to Tier 1 developers in key markets. The market today presents many opportunities for last-mile finance across projects that require a minimum amount of gap funding for completion.
Piramal Group has a long-standing track record of both primary development and wholesale funding in real estate. It also has a fiduciary fund management business across multiple funds and mandates across structured, preferred and pure equity.
IIFL Wealth is one of the leading wealth managers in the country today, with aggregate assets of around INR 1,70,000 crores under management, advice and distribution. Headquartered in Mumbai, IIFL Wealth Management has more than 950 employees and presence in 6 major global financial hubs and 23 locations in India.
Khushru Jijina, Managing Director, Piramal Capital & Housing Finance Ltd said, “The creation of this AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions. We will initially seed the fund with existing loans from Piramal Group’s portfolio, while continuing to explore quality deals from the market in future.”
With this, Piramal will also be facilitating external capital (on a fund or co-investment basis) alongside its lending business. This will enable Piramal Group to continue to further grow the lending business through a new co-investment / co-origination model.
Karan Bhagat, Founder, MD & CEO, IIFL Wealth Management said, “Piramal’s deep domain expertise in real estate and IIFL Wealth’s ability to seize the best market opportunities have resulted in well-structured investment idea which will provide clients an ideal risk-adjusted return.”
IIFL Asset Management has raised a cumulative AUM of ~INR 7000 crores across 8 real estate funds, till date. Of which, it has fully exited first two funds, generating gross IRRs of 18-22%.