Anand Rathi realty fund closes

MUMBAI: Having raised seed amount for its realty fund, Anand Rathi (AR) Venture Funds has closed the first scheme at Rs 150 crore to start financing real-estate projects in Tier-II cities (mini metros) like Coimbatore, Mysore, Pune, Ludhiana, Kanpur, Bangalore and Agra.

The Rs 500-crore realty fund will concentrate on funding developers in small cities for residential projects. Additionally, it will also take some exposure in pre-leased offices, which will provide it stability with fixed returns in the form of rentals.

The fund’s focus on investments in residential projects is driven by the fact that they offer self-liquidating exit for investments unlike other asset classes such as shopping malls and hotels, which require a mature secondary market that does not exist at present in India. The fund would selectively fund retails projects too.

“It is an interim close of the fund so that we can start financing projects and simultaneously raise funds for the second scheme. We have kick-started the process to launch our overseas $75-million-fund by January-end. That would happen following approvals from authorities,” says Anand Rathi (AR) Venture Funds chief executive officer Sumit Anand.

The second scheme of the fund would be marketed to foreign private banks and institutional funds looking to diversifying in emerging markets like India.

Anand says the fund has already tied up with developers for jointly acquiring land for various projects. “We will be investing around Rs 30 crore in the next 30-50 days,” he adds.