IL&FS raises $895 mn for second realty fund

Braving a slowdown a leading private equity fund manager, announced the closure of its IL&FS India Realty Fund-II (IIRF2) at $895 million, exceeding the target by $145 million.

Braving a slowdown, IL&FS Investment Managers Limited (IIML), a leading private equity fund manager, on Tuesday announced the closure of its IL&FS India Realty Fund-II (IIRF2) at $895 million, exceeding the target by $145 million.

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IL&FS sees the current market environment providing good investment opportunities in the real estate sector. The fund raising was assisted by Presidio Partners USA. In April 2006, IIML’s first Real Estate Fund (IIRF 1) had raised $525 million.

“The current market situation and capital scarcity (among real estate developers) provide valuable opportunities,” said Archana Hingorani-CEO and Executive Director, IL&FS.

IL&FS proposes to invest the IIRF2 proceeds in mid-market real estate developers in need of growth capital, both in Tier I and Tier II cities. It expects the real estate developers in which it had invested its first fund to be potential investment opportunities for the second fund.

The first fund had invested in several companies including Unitech and Dynamix Balwas. Investment in a single firm would range from $25-$75 million.

Investors committing to the IIRF2 include state pension funds, foundations and university endowments across the globe, with new investors coming from US, Germany, Japan and the Middle East. The total private equity funds raised exclusively for investments in real estate sector till the end of 2008 totalled $17 billion.