Piramal Group, IIFL Wealth announce Rs 2,000-crore alternative investment fund

Piramal Group and IIFL Wealth Management announced on Wednesday that they will invest in an alternative investment fund (AIF) platform to fund select advance stage or last-mile real estate projects in Tier-1 cities. The AIF will have a target size of Rs 2,000 crore and will be used to provide capital to developers in key markets.

Khushru Jijina, managing director at Piramal Capital & Housing Finance, said the creation of the AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions. “We will initially seed the fund with existing loans from Piramal Group’s portfolio, while continuing to explore quality deals from the market in future.”

With this, Piramal will also be facilitating external capital (on a fund or co-investment basis) alongside its lending business. “This will enable Piramal Group to continue to further grow the lending business through a new co-investment/co-origination model,” the statement said.

Till date, IIFL Asset Management has raised a cumulative assets under management of approximately Rs 7,000 crore across eight real estate funds, a release said. It has fully exited first two funds, generating gross internal rate of return of 18-22%.

The announcement comes at a time when the real estate sector is going through a rough phase, with the cash crunch hitting many developers leading to a number of projects getting stalled. The government recently announced a Rs 25,000-crore AIF aimed at reviving stalled housing projects. The fund has hit its first close of Rs 10,530 crore.