Motilal Oswal Real Estate mops up Rs 650 crore for realty excellence fund

Motilal Oswal Real Estate (MORE), the real estate private equity arm of Motilal Oswal Group, has raised Rs 650 crore for its India Realty Excellence Fund (IREF) IV, and another Rs 350 crore will be raised by March 2019, chief executive officer Sharad Mittal. Mittal indicated that the first of the deployments from the fund is likely to commence in a month. “We have not yet started investing from the fourth fund. Ours is a family office and high net worth individuals (HNIs)-driven fund. We think the fund-raising should be over by March next year. In about 30-45 days, we are likely to make the first of the investments from this fund,” he said. On Monday, MORE announced that it has exited an investment with Shriram Properties, a real estate developer in the Bangalore market, from its India Realty Excellence Fund II (IREF II). The exit has been from the residential project Shriram Greenfield near Whitefield, Bangalore, it said. Shriram Greenfield is a residential project of about two million square feet being developed in two phases. Construction had commenced in 2015 and within four years the first phase is nearing completion. Construction for the second phase is underway. “Cumulatively, the project has seen more than 75% of the inventory being sold,” MORE stated in a release. “We felt that it is an opportune time to move out of it and return that money to our investors,” Mittal said. IREF II is a Rs 500-crore fund raised by MORE which achieved its final close in April 2015. “The fund invested during the period of 2014-2017 and is fully deployed across 14 investments (including re-investments),” MORE said in a release. The fund had invested Rs 67 crore in December 2014 by taking an equity stake of about 49% in the project and has now exited with an internal rate of return (IRR) of about 20% and a multiple of 1.87x. The fund has returned 107.5% of the corpus (including capital and interest) to its investors within three-and-a-half years from its final close. It has another 40% capital invested across its balance six investments which would be exited over the next two-three years. IREF II has till date secured eight complete exits at an average IRR of 21.2%. MORE was founded in 2008 as a 100% subsidiary of MOPE Investment Advisors (MOPE) – the Private Equity arm of Motilal Oswal Financial Services. MORE is currently managing four real estate funds. Cumulative assets under management (AUM) under MORE stand at more than Rs 2,700 crore.