PE funds and NBFCs join hands for real estate deals

Q: Private equity (PE) funds and non-banking financial companies (NBFCs) are joining hands to invest in real estate projects.

Santosh TR,

8th December 2015

Real estate News in Mumbai

investment in real estate

pe funds

nbfc

private equity funds

non-banking financial companies

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Replies (3)

Hi folks,
But in many cases it is found that small NBFCs or PE funds are approaching large funds to involve them in deals that the former are unable to execute on their own.

Diptarishi dev, Kolkata

8th December 2015

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Right Diptarishi,
Deal sizes have also increased in 2015, with investors writing larger cheques to meet developers' growing demand for capital.

We are in favor of such coalition deals allowing a much larger corpus (Rs.100-150 crore) being invested into a deal and having the option of exiting individually as per the individual fund structures.

Pranay Malhotra, Delhi-NCR

8th December 2015

Abosolutely right Parag.
They are taking risk in a inactive market and and undertaking big-ticket transactions. This year has seen quite a few such deals and sector experts say this is just the beginning. There are a number of smaller transactions taking the collaboration route as well.

Pranay Malhotra, Delhi-NCR

8th December 2015

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We have read that in October, Piramal Fund Management Pvt. Ltd and Altico Capital India Pvt. Ltd co-invested Rs.720 crore in multiple projects of Century Real Estate Holdings Pvt. Ltd in Bengaluru.

In another occasion, the Shapoorji Pallonji Group partnered with Standard Chartered Private Equity, International Finance Corporation (IFC) and the Asian Development Bank (ADB) in August to build 20000 affordable homes across the country. The partnership will invest about $200 million in the project.

Parag Shukla, Bangalore

8th December 2015

@Parag,
Finally, co-partnership among investors will be more clear in large-ticket lending or private equity deals. It will be driven mostly by the investors' need to manage close attention. There will be a separate kind of lead investors who will be in the lead of this, who will originate, negotiate, structure large-ticket investments, ensure all or a significant part of these, and bring limited partners or co-investors to subscribe to part of the investment.

Pranay Malhotra, Delhi-NCR

8th December 2015

It is right and real estate market is still dominated by single-investor deals as far as private equity is concerned, many alliance deals are taking place on the structured debt side.

NBFCs have also been aggressive lenders to real estate, leading to competition with PE funds.

Parag Shukla, Bangalore

8th December 2015

Hi Santosh,
I read this news. Over the past 2 yrs, the realty sector has seen its worst ever slowdown, but this has not keep back PE funds and NBFCs from backing developers in need of finance.

In fact, a lot of capital is chasing a handful of good deals, leading to tough competition among investors and more plans for collaboration.

Parag Shukla, Bangalore

8th December 2015

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