IDFC Alternatives announces the close of its first real estate fund IDFC Real Estate Yield Fund, a domestic fund focused on the residential real estate segment in India.
Despite the slowdown in the economy, the fund has raised Rs 7.5 billion from domestic investors within a short span of 10 weeks. The fund is targeting residential projects which are under construction across the top 6 cities (Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Pune). It is a focused debt fund with a medium term horizon and has already committed Rs 1.23 billion across two residential projects in Pune and Bangalore.
MK Sinha, managing partner & CEO, IDFC Alternatives said, "This is our first real estate fund and we feel confident about its performance. The real estate sector is going through a tough phase in the backdrop of a market slowdown and most developers are stretched with reduced cash flows. This is the right time to plough money into the sector and structure transactions that will provide high yields going forward."
Ritesh Vohra, partner-real estate investments, IDFC Alternatives said, "This fund has some key differentiators - it is a focused debt fund that targets a regular distribution of income to investors. The fund would be invested in on-going residential projects to mitigate execution related risks. It has a lower risk profile given the secured nature of underlying investments and has been designed to be an investor-friendly product."