P RIVATE E QUITY: I NTRODUCTION
A Private Equity Fund invest in the securities of the unlisted companies.
Type of Private Equity Funds
Growth Funds are funds whereby money is collected from investors
and invested into securities of unlisted companies having significant
growth potential by way of debt or equity investments.
Real Estate Funds are funds whereby money is collected from investors
and is then invested into securities of unlisted companies involved in the
Real Estate business by way of debt or equity investments.
PIRAMAL | INDIAREIT
PRESENTS
REAL ESTATE PRIVATE EQUITY
DOMESTIC FUND SCHEME V
KEY DEFINITONS
Sponsor
Sponsor in the case of INDIAREIT is PIRAMAL GROUP.
Warehousing Benefits
Warehousing means that in case there is a deal and there is not
enough money in the fund for its execution then the sponsor
provides temporary capital for the execution of the deal.
Vintage Year
The year of inception of the fund.
Exits Term Sheeted
Exists whose terms are negotiated and are at or near completion.
Ticket Size
Minimum Ticket Size is Rs 25 Lakhs which is to be paid over a
period of 2 + ( Extension of 1 Year) from interim close. The
money to be paid upfront is 10% of the total investment amount.
Fund Duration
The duration of the fund is 6 + (2 extension of 1 year) from
Interim Close. This is a close ended fund with a tenure of 6 to 8
years.
Hurdle Rate
12% p.a. This implies that the fund will have a profit sharing with
the investor only above 12% in the specified ratio.
STRONG SPONSOR – PIRAMAL GROUP
UNPARALLELED ALIGNMENT
The sponsor has a commitment of 7.5% to the fund, as against market
norm of 2-3% and is treated in equality with other investors.
SUPERIOR DEAL SOURCING
ABILITY
Strong brand, governance and pool of capital with ability to close quickly,
facilitating proprietary ‘off market’ deal flow and first point of call’ from
preferred partners (developers).
Willingness of the sponsor to warehouse deals in advance of fund raising,
providing
WAREHOUSING BENEFITS
• Access to distress deals with short funding timelines, and
• Deployment immediately on drawdown; accrual of IRRs from Day 0
Unique ability to close large ticket transactions through significant ‘coinvestment’ capital, providing
COINVESTMENTS
•Access to a wider deal universe
• Preferred deal terms due to limited competition
WHY INDIAREIT? – PIONEERS IN REAL ESTATE INVESTING
CONSISTENT MARKET
LEADING STRATEGY
VALIDATED TRACK
RECORD
• Successfully provided growth capital to mid-sized local developers,
for residential projects in tier 1 cities, since inception.
• Amongst first and few funds to complete full cycle of raising,
deployment, effecting exits and distributions.
• Manage/advise 4,229 Cr; Already returned INR 838 Cr from own
funds and INR 152 Cr from managed accounts.
PERPETUAL SOURCE OF
CAPITAL
• Consistent ability to raise funds across market cycles.
• Deployment of INR 400-700 Crores annually.
ABILITY TO CAPITALIZE
ON AN
UNPRECENDENTEND
MARKET
• Liquidity pressure for developers.
• Limitations in sources of funding
• Opportunity to structure transactions with equity-like returns and
debt-like risk
HIGHLY EXPERIENCED MANAGEMENT TEAM
DEEP BENCH
STRENGTH
Talented and
empowered
professionals
STABLE AND
GROWING
TEAM
120+ years of
cumulative real
estate experience
MULTI-CITY
PRESENCE
23 professionals
in four offices
DIVERSE
SKILLS
Strong investment
and asset
management
capabilities
HIGHLY EXPERIENCED MANAGEMENT TEAM
T RACK R ECORD
OF PREVIOUS PRODUCTS
CONSTANT ABILITY TO FUND RAISE, DEPLOY AND EXIT THROUGH DIFFERENT MARKET CYCLES
W HY R EAL E STATE
IN THE
C URRENT E NVIRONMENT ?
CURRENT MARKET ENVIRONMENT PRESENTS HUGE OPPORTUNITY FOR STRUCTURED INVESTMENTS
LIQUIDITY PRESSURE
FOR DEVELOPERS
• Slow sales velocity and hence limited internal accruals
• Costs of construction increasing faster than general
inflation
LIMITATIONS IN
SOURCES OF FUNDING
• Banks / Capital Markets reducing exposure to this sector
• No acquisition funding from banks.
• NBFC terms inflexible.
EXCEPTIONAL
OPPORTUNITY TO
STUCTURE FAVORABLE
TRANSACTIONS
• Developers willing to offer higher pricing in return for
flexible capital
• Deals offering substantial security, downside protection
and opportunity for upside.
• Developers also benefit from better realizations rather
than having to sell their stock for cheap
W HY D OMESTIC F UND S CHEME V: FOCUS ON
TIER 1 CITIES
• Mumbai, Bangalore, Pune, Chennai,
NCR; more resilient markets with
sustained demand and easier exits
MID SIZED
RESIDENTIAL
DEVELOPMENTS
• Appropriately sized land parcels
ensuring investments fructify during
fund life
END USER
AFFORDABILITY
• Consistency and regularity of end
product sales
W HY D OMESTIC F UND S CHEME V: EXECUTION
ALIGNMENT OF
PARTNER
INTEREST
ACTIVE
MONITORING OF
PROJECTS
• ‘Skin in the game’; Experienced
partners with demonstrated
execution capabilities.
• Local team presence; Regular
and rigorous reporting
mechanisms
W HY D OMESTIC F UND S CHEME V : DOWNSIDE PROTECTION
NON SPECULATIVE
UNDERWRITING
• No title or aggregation risk; ‘last
mile’ funding
RELEVANT
ADDITIONAL CONTROL
MECHANISMS IN PLACE
TO FACILITATE EXIT
• Escrow mechanism; appropriate
project rights and representation.
KEY FUND TERMS
Thank You
2 ND
M OTILAL O SWAL S ECURITIES LTD.
F LOOR , PALM C OURT C OMPLEX , N EW L INK R OAD, M ALAD
(W EST ), M UMBAI 400 064
Motilal Oswal Securities Ltd. (MOSL) Member of NSE, BSE and MCX-SX
Reg. Office: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai 400 064. Tel: 022 3080 1000. Registration
Nos.: NSE (Cash) : INB231041238 ; NSE (F&O) : INF231041238 ; NSE (CD) INE231041238 , BSE (Cash) : INB011041257 ; BSE(F&O) :
INF011041257 ; MCX-SX (Cash) INB261041231;MCX-SX (F&O) INF261041231; MCX-SX (CD) INE261041231 ;CDSL : IN-DP-CDSL-09-99 ; NSDL
: IN-DP-NSDL-152-2000 ; AMFI :ARN 17397 #PMS : INP000000670; #PMS & Mutual funds are offered through Motilal Oswal Asset Management
Company (MOAMC) which is group company of MOSL. PMS Regn No. INP000004409 is offered through Motilal Oswal Wealth Management Pvt. Ltd
(MOWMPL) which is group company of MOSL #Motilal Oswal Commodities Broker Pvt Ltd (MOCBPL) member of MCX, NCDEX and NSEL. MCX
Member ID 29500, NCDEX – NCDEX-CO-04-00114, NCDEX Spot Exchange Limited 10014 & National Spot Exchange Ltd (NSEL): 13730. FMC
Unique membership code: MCX: MCX/TCM/CORP/0725, NCDEX: NCDEX/TCM/CORP/0033. Commodity Services are offered through MOCBPL
which is a group company of MOSL. Motilal Oswal Securities Ltd is a Distributor of Mutual Fund, IPOs and Insurance Product. *Investment in securities
is subject to market risk.