August 17, 2023: Motilal Oswal Alternates (MO Alts), the alternative investments arm of Motilal Oswal Financial Services, is set to raise up to Rs 2,000 crore through its recently launched sixth real estate fund, India Realty Excellence Fund-VI (IREF-VI).
MO Alts is strengthening its presence in the real estate sector with a focus on early-stage investments. To date, it has invested capital through five real estate funds. The firm also manages other standalone and proprietary investments. The company has till date undertaken more than 140 transactions and funded over Rs 7,500 crore across 50 developers in India. It has also successfully exited more than 70 transactions and generated an interest of more than 20% in these exits.
IREF-VI will focus on early-stage investments in mid-income/affordable residential projects across India’s top 8 cities, including Mumbai, Delhi-NCR, Pune, Bangalore, Chennai, Hyderabad, Kolkata and Ahmedabad. Additionally, selective investments in commercial projects will be pursued.
Registered with the Securities and Exchange Board of India, the fund has been set up as an alternate investment fund (AIF Category-II). It expects to achieve its first close by December this year and complete the fund-raising process within the following 6-9 months.
Vishal Tulsyan, MD & CEO, MO Alts, said: “Over the past decade, our real estate private equity business has experienced significant growth while achieving remarkable milestones. We firmly believe that the real estate sector has undergone a robust structural recovery, underpinned by strong fundamentals, paving the way for a momentum-led growth trajectory. As we enter the next decade, we are incredibly optimistic about the real estate market, foreseeing it as a prime period for growth. With unwavering commitment, we shall continue to strengthen our presence in this dynamic space.”
Saurabh Rathi, co-head of real estate funds at MO Alts, said: “Amid the global challenges posed by the COVID-19 pandemic, 2022 witnessed a remarkable resurgence worldwide, with India emerging as a pivotal force in the global economy. Despite prevailing global economic slowdowns, our nation’s steady domestic consumption and robust macro-economic fundamentals have paved the way for sustained growth. Throughout this period, the Indian real estate market has demonstrated remarkable resilience, remaining buoyant and showing promising signs for the upcoming years. It is this optimism and favorable market outlook that have led us to seize the opportune moment to introduce our next fund. Our focused ground up approach to investing, frugal underwriting and proactive asset management practices have helped us create right levers for next phase of growth in this tail-winded environment for real estate.”
Anand Lakhotia, co-head of real estate funds at MO Alts, said: “Early-stage investments in real estate present a significant opportunity, especially considering the crucial capital requirement developers face at the beginning of a project. With various restrictions on banks and NBFCs to fund this critical phase, coupled with the promising outlook of the real estate market, our fund is strategically positioned to seize this opportunity.”
“Our investment strategy, evident in our earlier funds, centers around partnering with established developers in their mid-income/affordable housing projects through structured debt. This approach has yielded positive results, particularly with our focus on IT cities, over the past few years, affirming our commitment to delivering strong returns for our investors. Moving forward, we will continue to work closely with our preferred partners and capitalise on our existing successful strategy.”
MO Alts is currently managing five real estate funds: the India Realty Excellence Fund, the India Realty Excellence Fund-II, the India Realty Excellence Fund-III, the India Realty Excellence Fund-IV and the India Realty Excellence Fund-V (IREF V), along with other standalone & proprietary Investments. Today, the cumulative assets under management under the platform stands at more than Rs 7,500 crore.
