Ex-Wells Fargo realty investment team to launch PE funds
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Mumbai: In 2013, when Wells Fargo Real Estate Advisors Pvt. Ltd decided to stop further investments in India, six members of the management team decided to stick together and float their own venture.
The venture, called Capitedge India Investment Advisory Co. Pvt. Ltd, is now looking to raise Rs.300 crore across two residential funds. The members would also act as sponsors for the fund.
“We plan to file two applications by December this year to raise funds for investing in the residential space,” said Saandip Kundu, managing director at Capitedge, who was earlier managing director, Asia, for real estate at Wells Fargo.
Each fund will be roughly Rs.125-150 crore and invest in residential projects across the top five cities. The funds will be raised from wealthy individuals and invested via equity and debt deals, with the expectation of generating an internal rate of return of over 20%.
“Some of the investors wanted to invest in specific strategies like a residential fund which deals in debt or last-mile funding of projects or pure equity investments. Thus we have decided to raise smaller-sized funds targeting specific strategies,” said Puneet Bhatia, who joined Capitedge in October.
Apart from these two funds, Capitedge plans to file its third application by March next year to raise another domestic fund.
Capitedge joins a number of other domestic funds that are in the process of raising money, including Religare Credit Advisors Llp, Milestone Capital Advisors and ASK Property Investment Advisors Pvt Ltd. Based on announcements made since the start of this calendar year, Indian real estate focused private equity (PE) funds are looking to raise over $6 billion, in addition to $1.6 billion that has already been raised. In 2007-08, real estate focused PE funds had raised $8.1 billion.
“I think the fund-raising environment has improved and it is the right time to go out and raise capital. People are expecting demand for real estate to pick up in next three-four years and more capital would be raised by private equity funds,” said Anshul Jain, chief executive officer at global property advisory firm DTZ India.
Capitedge started out as the asset management company (AMC) for Wells Fargo’s investments in India, when Wells Fargo decided to exit India. Since September last year, the portfolio has been wound down and existing investments exited. Apart from launching funds, the firm will also look at third-party asset management if it finds a deal.
Other members of Wells Fargo who joined the team include Ananda Bhattacharya, Priyank Gupta and Prashanth Shetty. The team members had also worked together during their early days at ICICI Bank Ltd across various departments such as retail lending, construction funding, land advisory, construction and financing.
Apart from fund raising, Capitedge has also hired a merchant banker to look at acquiring a real estate-focused non-banking financial company.
“We have initiated the process, but it will take another six months before things fall into place. It will invest in the real estate space,” said Bhattacharya.