Bengaluru: Neev Asset Advisors LLP, a new real estate-focused investment firm, backed by Manipal Education Group chairman T.V Mohandas Pai and chief executive of Manipal Education and Medical Group, Ranjan Pai, and other investors, has raised Rs200 crore and made its first investment in a project in Bengaluru.
The fund, Neev Capital, which is targeted at small residential projects of mid-sized developers, has invested Rs25 crore in a debt financing deal in a residential project in Bengaluru.
“The project is in an early stage and the money has been given for its development. We are looking to invest in short-duration real estate projects that will be complete in 18-24 months and will invest in the range of Rs 20-25 crore,” said Mohandas Pai, former chief finance officer, Infosys Ltd. He didn’t disclose details of the developer.
Neev has raised Rs200 crore from its general partners (GP) or fund managers as well as from limited partners (LP). Limited partners are entities that include high net-worth individuals and others, that are a source of money for PE firms.
It is also in the process of exercising the greenshoe option to raise an additional Rs 50 crore from investors.
Neev’s investment strategy is to build a portfolio that will be balanced with exposure across various locations, asset classes and investment positions. This diversifies the portfolio allowing better risk and return management.
While the firm may invest in other cities going forward, the focus is on Bengaluru for now, Pai said.
Demand for capital has been high in real estate, with the sector undergoing its worst ever slowdown. The good thing though is, the access to capital has been easier and investors such as private equity funds and non-banking financial companies (NBFC) have been actively deploying capital.
“While there is a funding gap and smaller developers need capital, the challenge for investors would be to find credible partners with a delivery track record with customers, if they want the desired returns. The slowdown and the Real Estate Regulatory Act will compel small developers to raise external financial support to survive and grow,” said Somy Thomas, managing director (valuations and advisory) at property advisory Cushman and Wakefield India.