Piramal Fund Management has launched a new fund targeting buying of individual residential units - 'Indiareit Apartment Fund' seeks to acquire residential units in Tier 1 markets at a significant discount to prevailing market price, by offering a bulk purchase to the developers.

The target fund size is Rs 3.50 billion (+ a green-shoe option of a further Rs 3.50 billion) with average deal tenure of 2-3 years per transaction. IIFL Wealth Management is acting as exclusive distributor for the first close.

The fund is specifically targeted towards those individuals who, beyond a primary home, look to invest directly into real estate as an asset class. The fund will therefore underwrite units only i.e. physical square feet rather than financial participation, whilst adhering to the basic tenets of a defined use of funds, appropriate security and monitoring as well as ensuring developer alignment and project completion - key risks that a retail buyer in the open market would want to address.

The fund has already seeded its first transaction, a Rs 500 million investment in Mumbai and has identified a further pipeline of similar transactions even as the fund raising progresses.

Khushru Jijina, managing director, Piramal Fund Management said, ''This Fund has been formed over many months of conceptualization and structuring. We are extremely heartened with the response having collected Rs 100 cr in a matter of days. This offering adds to our existing bouquet of services i.e. structured equity, senior debt, and construction finance and furthers our engagement with development partners to meet their requirements.''

Shares of the company gained Rs 8.10, or 1.15%, to trade at Rs 710. The total volume of shares traded was 12,091 at the BSE (2.23 p.m., Tuesday).