Kailash Babar, ET Bureau Aug 25, 2011, 06.12am IST
MUMBAI: Reliance Portfolio Management Services, a part of Reliance Capital Asset Management, plans to raise over . 1,500 crore from the domestic market to invest in real estate projects around the country, said persons familiar with the development. The fund will be raised though a limited liability partnership structure and will be named as Reliance India Realty Opportunities LLP. Reliance Capital Asset Management -Portfolio Management Services will act as the advisor to Reliance Realty.
The Reliance-ADAG group had tried its hand in property market in the past, but this will be its maiden effort to raise money to invest in the real estate market on behalf of investors. It also comes at a time when investors are keeping away from realty market due to rising uncertainty. The sources said that the fund would engage in acquiring, developing and investing in real estate assets and projects .
A spokesperson of Reliance ADAG offered no comments in response to an email query sent last week. Reliance Realty will focus on investing in residential projects in the top seven or ten metros, and place emphasis on engaging in easy to execute, shorter gestation and lower risk real estate projects with a clear focus on exit opportunities, says an information memorandum, a copy of which is available with ET. "Now is the opportune time to invest in real estate on account of prevailing constraints in the banking sector , high interest rates, weakness in off take, all causing stress to the sector," the memorandum says.
The fund will have time frame of six years that can be extended twice by one year each at the option of the managing partner Reliance Realty. Investors are expected to commit minimum capital of . 25 lakh and in multiples of . 1 lakh thereafter, with 30% being contributed upfront and balance in tranches over four years. For the governance committee of the fund, Reliance Realty has roped in two external members—VK Chopra, former whole-time board member of Sebi, and PP Vora, former chairman and MD of NHB.
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