Essel Finance, the private equity arm of India’s Essel Group, is approaching the first and final close of its second real estate debt fund, Asset 2, on Rs 300 crore ($44.8 million, €40 million), in September this year.
The four-year close-ended fund was launched in May and targets a 20 percent IRR with a focus in residential projects. It uses senior secured debt strategy with a typical investment size of $8million to $10 million.
Amitabh Chaturvedi, the managing director of Essel Finance, told PDI that the company prefers a conservative strategy and is more comfortable in investing within the residential sector which Essel has been doing since their first fund.
The fund attracts investments from domestic investors, particularly high-net worth individuals, according to Chaturvedi.
The fund manager closed its first real estate debt fund, Asset 1, in December. It took only eight months to raise Rs 250 crore in their first and final close. The fund also focused on residential projects in India and has been fully deployed to-date.
The competition in the Indian real estate debt market is hostile with Indiabulls Alternative Investments Ltd launching a Rs 1000 crore new fund and IDFC launching its $110 million second real estate debt fund this year.
Essel Finance is one of India's leading private sector financial services company under the Essel Group. Essel group is an $8 billion conglomerate that has foothold in entertainment, media, packaging, infrastructure, education, precious metals and technology sectors.