MO Alts, the alternative investment arm of Motilal Oswal Financial Services, is set to raise up to Rs 2,000 crore through its sixth real estate fund, IREF VI. Focusing on mid-income and affordable residential projects across top Indian cities, IREF VI aims to reinforce MO Alts' presence in the real estate sector. The fund is structured as an AIF Category II registered with SEBI, with the first close expected by December 2023. The cumulative AUM under MO Alts surpasses USD 2 billion. The leadership envisions robust growth, propelled by a resurgent real estate sector and strong fundamentals, while a proactive approach underscores the strategy's success.
Motilal Oswal Alternates (MO Alts), a division of Motilal Oswal Financial Services Limited, is preparing to raise a significant amount of up to Rs 2,000 crore through fundraising efforts. This move comes courtesy of their newly launched sixth real estate fund, christened "India Realty Excellence Fund VI (IREF VI)." With a keen focus on early-stage investments, MO Alts is all set to further fortify its presence in the real estate sector, leveraging its past successes in real estate funds. The firm's extensive experience in real estate management shines through, as it has executed more than 140 transactions and provided funding of around Rs 7,500 crore to 50 developers across India. Impressively, the company has notched up an impressive IRR of over 20% through more than 70 successful exits.
IREF VI is strategically positioned to centre its investments on early-stage ventures in mid-income and affordable residential projects across the nation's leading 8 cities, which include Mumbai, Delhi-NCR, Pune, Bangalore, Chennai, Hyderabad, Kolkata, and Ahmedabad. Additionally, the fund will selectively venture into commercial projects. Having registered as an alternate investment fund (AIF Category II) with SEBI, the fund plans to begin swiftly, targeting the first close by December 2023. This timeline sets the stage for the fundraising journey to conclude within the following 6 to 9 months.
Vishal Tulsyan, the MD and CEO of MO Alts, exudes optimism about the real estate landscape. He foresees a promising trajectory, driven by strong fundamentals and underpinned by a robust structural recovery. Saurabh Rathi, one of the Co-Heads of real estate funds at MO Alts, underlines India's remarkable resilience in the face of global adversities. Amidst the global turbulence, the country's domestic consumption and economic fundamentals have propelled it forward. Rathi points out that the Indian real estate market has remained steadfast, displaying remarkable buoyancy and promising prospects for the times ahead.
Anand Lakhotia, another Co-Head of real estate funds at MO Alts, emphasizes the lucrative nature of early-stage investments in real estate. Lakhotia highlights the critical capital requirement that developers face at the inception of projects, especially considering the limitations on funding from banks and NBFCs. In such a landscape, MO Alts' fund stands poised to seize this opportunity strategically.
The firm's investment strategy zeroes in on partnerships with well-established developers in the mid-income and affordable housing sectors, employing structured debt. This approach has consistently yielded positive outcomes, especially with a targeted focus on IT cities in recent years. This strategy solidifies their commitment to ensuring substantial returns for their investors. As they look ahead, MO Alts plans to remain deeply connected with their preferred partners and leverage their existing successful strategies for sustained growth in this promising real estate environment.
In response to queries on developer selection, MO Alts emphasizes its stringent approach, including background checks, market reputation assessments, sales evaluations, and thorough due diligence. This thorough evaluation ensures that they choose developers with a robust track record and the ability to deliver projects on schedule. This meticulous approach addresses a major concern among end-users: ensuring the developers' reliability and trustworthiness.
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