Purva Asset Management Pvt Ltd, a subsidiary of real estate firm Puravankara Ltd, has received commitments of around Rs 200 crore from investors, marking the first close of its maiden alternative investment fund (AIF-II).
Launched with a target corpus of Rs 750 crore, domestic UHNIs and family offices form the bulk of the initial commitment. "The target is to raise the entire corpus for the fund by September 2022. The fund will create a significant pool of capital via the AIF route for growth by creating a win-win scenario for investors and Puravankara," said Ashish Puravankara, MD of Puravankara.
The Category II AIF Purva Real Estate Fund, which recently got the mandatory Sebi approval, will be managed by Purva Asset Management, and the first fund scheme is called ‘Purva Residential Excellence Fund-1’.
The fund will invest in a mix of plotted and residential developments under the ‘Purva Land’ and ‘Provident’ brands across cities – Bangalore, Pune, Chennai, Hyderabad, and MMR. It will also invest in 6-8 mid-sized projects of Provident Housing with a four-year development timeline.
Puravankara is a sponsor of the fund, and the two parties will co-invest in projects and acquire land parcels. The fund has offered a target IRR of 25% with a 12% IRR guaranteed by the sponsor of the fund.
"There are protection clauses for the fund and its investors, including a price protection clause. The revenue sharing kicks in as soon as a project is launched and at the end of 66 months, which is the fund life, any residual investments will be bought back by Puravankara at a pre-identified internal rate of return, or IRR of 12%," said Shailesh Viswanathan, director, Purva Asset management.
In 2020, IFC and IFC Emerging Asia Fund partnered with Puravankara to invest $76 million in the latter’s affordable housing projects in India. The Bangalore-headquartered firm has 16 million sq. ft. of planned launches across the residential segment, with an investment of Rs. 4000 crore over the next few years to develop these assets.
