ASK Property Investment Advisors, the private equity arm of Indian financial group ASK, has launched a INR2 billion special situations fund in the residential real estate market.
The new fund will offer preferred equity, where the capital will be securitised like debt but repayments will have equity-like flexibility.
The fund will invest in mid-segment residential projects in Mumbai, the National Capital Region, Pune, Chennai, Bengaluru and Hyderabad.
“This separate pool of capital will be for projects where sales are slow, and we come in and refinance the developer’s debt and give him flexible money with no immediate urgency to repay. This ensures that the developer focuses on execution and, as investors, we can focus on project control and risk management,” said Amit Bhagat, chief executive and managing director, ASK Property Advisors.
The fund represents the firm’s first significant departure from pure equity investment in the real estate sector.
The firm closed its maiden offshore real estate fund at around $100 million, 50 percent short of its original target, in May this year.
The investment manager has raised four private equity real estate funds since 2011 in India and all of these funds have reached final closes. According to PERE research, ASK Group is currently investing its INR3.17 billion third domestic private equity real estate opportunistic fund, ASK Real Estate Special Opportunities Portfolio – I.