Motilal Oswal Alternates set to raise Rs 2,000 Cr for its sixth real estate fund
Mumbai, 17th August2023: Motilal Oswal Alternates (“MO Alts”), the alternative investments arm of Motilal Oswal Financial Services Limited is set to raise up to Rs 2,000 Cr through its recently launched sixth real estate fund “India Realty Excellence Fund VI (IREF VI).” Building on the success of its previous real estate funds, MO Alts is further strengthening its presence in the real estate sector with a focus on early-stage investments.
MO Alts, till date, has invested capital in the real estate sector through five real estate funds. The Firm also manages other standalone and proprietary investments. MO Alts is a seasoned real estate manager and has till date undertaken more than 140 transactions and funded ~ Rs. 7,500 Cr across 50 developers in India. They have also successfully exited more than 70 transactions and generated an IRR of more than 20% in these exits.
IREF VI will strategically 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.
The Fund has been set up as an alternate investment fund (AIF Category II) registered with stock market regulator SEBI. MO Alts expects to achieve first close by December 2023 and complete the fund-raising process within the following 6-9 months.
MO Alts is the alternative investments platform of Motilal Oswal Financial Services Limited. The cumulative AUM under MO Alts is more than USD 2 billion.
Mr. 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.”
Mr. Saurabh Rathi, Co-Head of real estate funds at MO Alts said “Amidst 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 fundamental shave paved the way for sustained growth. Throughout this period, the Indian real estate market has demonstrated remarkable resilience, remaining buoyantand 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.”
Mr. 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 capitalize on our existing successful strategy.”
About MO Alts – RE Platform
MO Alts is the alternative investments arm of Motilal Oswal Financial Services Limited (MOFSL). MO Alts RE Platform is currently managing five real estate funds, namely India Realty Excellence Fund (IREF), India Realty Excellence Fund II (IREF II) & India Realty Excellence Fund III (IREF III), India Realty Excellence Fund IV (IREFIV) and India Realty Excellence Fund V (IREF V) along with other standalone& proprietary Investments. Today, cumulative AUM under MO Alts RE Platform stands at more than Rs. 7,500 Cr. IREF, launched in 2008 was a ~Rs 164 Cr domestic real estate fund focused on equity investments in real estate projects in top three cities in India viz. Mumbai, Pune and Bangalore. IREF made 7 investment sand has secured exits in all 7 investments. On the back of its success, MO Alts RE Platform launched IREF II - a Rs 489 Cr domestic real estate fund. IREF II has made 14 investments till date (including re-investments) and secured 13 exits at an investment level IRR of 19.8%. The third fund, IREF III is a Rs. 1031 Cr domestic real estate fund focusing on early stage structured/ mezzanine investments. IREF III has made 26 investments across the top 6 cities in India with established developers and secured 18exits at an investment level IRR of 21.0%. The fourth fund, IREF IV is a Rs.1148 Cr domestic real estate fund focusing on early stage structured /mezzanine investments. IREF IV has made 37 investments across the top 7 cities in India with established developers and secured 18 exits at an investment level IRR of 20.7%. The fifth fund, IREF V is a Rs. 1215 Cr domestic real estate fund focusing on post approval projects. IREF V has made 15 investments till date and secured3 exits at an investment level IRR of 18.1%.
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For Further Contact Details
Rohini Kute Group Head – Corporate Communication, Motilal Oswal Financial Services Ltd Rohini.kute@motilaloswal.com