This is a Venture Capital Fund
FUND DETAILS:Fund Size: Initial: Rs 750 Crs., Green Shoe Option: Upto Rs 250 Crs
Target Return: Not Available
Hurdle Rate: 10% IRR per annum
Min Investment: Individual: Rs 25 Lakh; Corporate/ Insti. Investor: Rs. 10 Crs
Draw Down: 20% (Notice period is 15 Days)
Management Fee: 3%, One time charge, 2% p.a. of total commitment amount.
CARRY: 80:20 ratio (Investor : Investment Manager)
Investment Horizon: 6Years Extension- 1+1 years
Investment Tenure: 3 Years from date of final closing
TAXATION: Fund Income would be in the nature of dividends, interest income and capital gains at the time of the sale of investment. Interest income arising from portfolio companies or on short-term investments by fund would be taxed at the maximum marginal rate.
Tax Counsel- KPMG India Pvt Ltd
INVESTMENT MANAGER:Fund will be managed by Birla Sun Life Asset Mgt. Company Ltd
Advisory Team:
1. Mr Shashi Kumar, Head Real Estate having 20 years of experience.
2. Mr Jagannath Shetty, CFO having 20 Years of Experience.
3. Mr Shekhar Rangaraj, Head Business Development, more than 20 Years of experience.
LEGAL COUNSEL: Nishith Desai Associates
CUSTODIAN: Deutsche Bank AG
· Aditya Birla Real Estate Fund is registered with SEBI as Venture Capital Fund. Fund will be managed by Birla Sun Life Asset Mgt. Company Ltd.
· Fund plans to make investments in unlisted (some times in listed also) real estate firms through equity, equity-related and debt instruments.
· Fund will focus on residential projects and will mainly look at deals at project level, but may also look at investments at an enterprise level in privately held companies.
· Aditya Birla Group is regarded for its corporate governance & experience in infrastructure sector in India.
· Aditya Birla Group’s Aditya Birla Private Equity- Fund I successfully raised Rs 675 Crore from domestic market at the time of First Closure recently.
INVESTMENT STRATEGY:· The fund proposed to invest in realty and realty related business in west & south India.
· Main Focus on Residential Realty.
· Investment at “Land Cost” Stage with well performer developers.
· Single Project Exposure should not increase 25%. Single Group Exposure should not increase 40%. Similarly they have set limit for Single City, Metro Exposure etc.
OTHER SIMILAR FUNDS:
· HDFC Property Fund- HDFC India Real Estate Fund (HI-REF)
· DHFL Venture Capital Fund - promoted by Dewan Housing
· Kotak Mahindra Realty Fund
· Kshitij Venture Capital Fund - a group venture of Pantaloon Retail India Ltd
· India Advantage Fund- promoted by ICICI Bank
GROUP’S PRIOR EXPERIENCE IN PRIVATE EQUITY:
Aditya Birla Private Equity- Fund I Portfolio:
· Anupam Industries Ltd, Rs 50 Crs in February, (a Gujarat-based makers of material handling equipment).
· Bombay Stock Exchange (BSE), Rs 21 Crs
FUND ANALYSIS AND RECOMMENDATION:Due to economic slow down, the price of properties has dropped significantly. Now the world economies are on recovery path. The people who deferred their purchases are now actively scouting for homes in both low and high cost segment. The builders have also well responded- Tata homes has sold recently premier class flats for more than Rs 4 Crs per unit after selling low cost nano homes in Mumbai suburb.
This fund will invest in west and south India like Mumbai, Pune, Hyderabad, and Bengaluru cities where either the demand is slightly more than supply or at least equal. Also, the fund will enter at Land Cost Stage and as per news in the market will probably exit after booking of the project but before final construction and hand over to the customer. The Fund has not disclosed its Target Return but expected to perform well.
On the basis of above discussion and Aditya Birla Group’s past experience in PE, Investor may invest in this Fund. However, the investment commitment size should not be too high as investment in the Venture Capital Fund hold more risk.FUND FACTS:· AUDITORS: S.R. Batliboi & Co.
FUND DETAILS:Fund Size: Initial: Rs 750 Crs., Green Shoe Option: Upto Rs 250 Crs
Target Return: Not Available
Hurdle Rate: 10% IRR per annum
Min Investment: Individual: Rs 25 Lakh; Corporate/ Insti. Investor: Rs. 10 Crs
Draw Down: 20% (Notice period is 15 Days)
Management Fee: 3%, One time charge, 2% p.a. of total commitment amount.
CARRY: 80:20 ratio (Investor : Investment Manager)
Investment Horizon: 6Years Extension- 1+1 years
Investment Tenure: 3 Years from date of final closing
TAXATION: Fund Income would be in the nature of dividends, interest income and capital gains at the time of the sale of investment. Interest income arising from portfolio companies or on short-term investments by fund would be taxed at the maximum marginal rate.
Tax Counsel- KPMG India Pvt Ltd
INVESTMENT MANAGER:Fund will be managed by Birla Sun Life Asset Mgt. Company Ltd
Advisory Team:
1. Mr Shashi Kumar, Head Real Estate having 20 years of experience.
2. Mr Jagannath Shetty, CFO having 20 Years of Experience.
3. Mr Shekhar Rangaraj, Head Business Development, more than 20 Years of experience.
LEGAL COUNSEL: Nishith Desai Associates
CUSTODIAN: Deutsche Bank AG
· Aditya Birla Real Estate Fund is registered with SEBI as Venture Capital Fund. Fund will be managed by Birla Sun Life Asset Mgt. Company Ltd.
· Fund plans to make investments in unlisted (some times in listed also) real estate firms through equity, equity-related and debt instruments.
· Fund will focus on residential projects and will mainly look at deals at project level, but may also look at investments at an enterprise level in privately held companies.
· Aditya Birla Group is regarded for its corporate governance & experience in infrastructure sector in India.
· Aditya Birla Group’s Aditya Birla Private Equity- Fund I successfully raised Rs 675 Crore from domestic market at the time of First Closure recently.
INVESTMENT STRATEGY:· The fund proposed to invest in realty and realty related business in west & south India.
· Main Focus on Residential Realty.
· Investment at “Land Cost” Stage with well performer developers.
· Single Project Exposure should not increase 25%. Single Group Exposure should not increase 40%. Similarly they have set limit for Single City, Metro Exposure etc.
OTHER SIMILAR FUNDS:
· HDFC Property Fund- HDFC India Real Estate Fund (HI-REF)
· DHFL Venture Capital Fund - promoted by Dewan Housing
· Kotak Mahindra Realty Fund
· Kshitij Venture Capital Fund - a group venture of Pantaloon Retail India Ltd
· India Advantage Fund- promoted by ICICI Bank
GROUP’S PRIOR EXPERIENCE IN PRIVATE EQUITY:
Aditya Birla Private Equity- Fund I Portfolio:
· Anupam Industries Ltd, Rs 50 Crs in February, (a Gujarat-based makers of material handling equipment).
· Bombay Stock Exchange (BSE), Rs 21 Crs
FUND ANALYSIS AND RECOMMENDATION:Due to economic slow down, the price of properties has dropped significantly. Now the world economies are on recovery path. The people who deferred their purchases are now actively scouting for homes in both low and high cost segment. The builders have also well responded- Tata homes has sold recently premier class flats for more than Rs 4 Crs per unit after selling low cost nano homes in Mumbai suburb.
This fund will invest in west and south India like Mumbai, Pune, Hyderabad, and Bengaluru cities where either the demand is slightly more than supply or at least equal. Also, the fund will enter at Land Cost Stage and as per news in the market will probably exit after booking of the project but before final construction and hand over to the customer. The Fund has not disclosed its Target Return but expected to perform well.
On the basis of above discussion and Aditya Birla Group’s past experience in PE, Investor may invest in this Fund. However, the investment commitment size should not be too high as investment in the Venture Capital Fund hold more risk.FUND FACTS:· AUDITORS: S.R. Batliboi & Co.
