Ropes in Lokanathan Nadar from
Wadhawan Group to lead the infrastructure vertical.
ArthVeda
Fund Management has set the process rolling for four private equity funds
in the real estate and infrastructure domain and is eyeing a total of seven
funds with assets under management of around $2 billion by 2015, a top company
executive told VCCircle.
ArthVeda
is a fund management company backed by private housing finance firm Dewan
Housing Finance Ltd.
The
plan appears bullish given the current fund raising climate. However,
expectations of softening interest rates could help boost demand for
residential housing. Even as overall economic slowdown has cast a doubt on
prospects for commercial and retail property, the fund house could be betting
on a bounce back in demand with interest rates peaking out.
Out
of the seven funds in the planning stage, five is already on the table. These
include two separate funds focused on low income housing projects besides a
middle income housing fund , an asset class agnostic offshore fund besides an
infrastructure fund.
Bikram
Sen, chief executive officer of ArthVeda said, “In the next three years we will
have asset under management of Rs 10,000 crore.”
The
firm is in the final stages of planning to launch the two funds targeted at low
income group housing projects. The first of these funds will be launched next
month with a targeted corpus of Rs 250 crore. The fund will be raised in
collaboration with Aadhar Housing Finance Ltd, the low income housing finance
arm of Dewan Housing Finance. Aadhar was formed in partnership with IFC, the
private investment arm of the World Bank, in February last year. The first fund
will stay invested for a short term period of three years.
The
second fund focused on low income housing will be a long term fund with a
target size of Rs 500-750 crore. The fund raising for the second fund will
happen in 2012-13.
Next
month ArthVeda is also planning to launch a small offshore fund which will be
open for investment in every asset class of realty sector, said Sen.
This
comes after it recently launched a Rs 300 crore real estate fund, called
ArthVeda Star Fund including a green shoe option of Rs 100 crore. The fund is
focused towards green field projects in the middle income housing segment.
Sen
said, “Around 75 per cent of the corpus of ArthVeda Star Fund will be invested
in tier II and III cities and in suburbs of metros and for the rest we have
flexibility but it will be dedicated to middle income housing projects only.”
He
added, this fund will invest Rs 5 crore-25 crore in each project and around 34 investments
will be made from this fund. It will invest from the early stage as it is
a purely greenfield focused fund and will exit the projects in three years or
maximum four years.
According
to Sen, ArthVeda Star Fund will manage to raise Rs 100-140 crore by the end of
this month and it expects a final closure by March-April this year. Around 40
per cent of the fund’s capital is expected to come from institutions, banks,
insurance trusts and rest from high net worth individuals. DHFL, the parent
company will come in as an anchor investor. The fund is aiming at a gross
return before expenses of more than 30 per cent.
Leveraging
its parent, DHFL’s housing finance clientele in these markets, the fund has
earmarked 16 cities across the country for its investments. It has already
vetted and signed Memorandum of Understanding (MoU) for close to 16 projects.
DHFL is tying up with a bank to provide construction finance to the developer
where ArthaVeda Star Fund will invest.
Lokanathan
Nadar To Head Infrastructure Vertical:
The
fund house has also announced today the appointment of Lokanathan Nadar to lead
the infrastructure vertical.
Nadar
joins ArthVeda from Wadhawan Group, where he was CEO - Infrastructure &
SEZ, where he was heading both the development of Pavana Multi Product SEZ and
other Infrastructure initiatives of the group. He comes with almost 15 years of
experience in the core infrastructure sector in the areas of project
development & construction, conceptualization, business development,
marketing and identification of new business opportunities.
“ArthVeda’s
growth strategy is built around a number of verticals; we are already managing
funds in the real estate vertical. With Mr Nadar joining the management of
ArthVeda the company is opening up its infrastructure vertical. His wide and
all round experience and in-depth knowledge of the core infrastructure sector
will help us launch a series of specialized infrastructure funds,” said Bikram
Sen.
Before
Wadhawan Group, Nadar has worked with Sterling SEZ & Infrastructure Ltd as
COO and prior to that he worked with IL&FS. Source: VCCircle
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