Bengaluru: Global alternative asset manager Apollo Global Management Llc has taken over JPMorgan Asset Management’s $300-million real estate portfolio in India as its new fund manager and general partner, said two people familiar with the development. Both JPMorgan and Apollo Global are New York-based firms, which have US and European investors as limited partners.
The deal expands Apollo Global’s assets under management (AUM) in India to around half-a-billion dollars. As part of the transaction, Apollo Global has inducted four people from JPMorgan’s India team.
JPMorgan’s real estate portfolio includes 15 investments across five cities.
It had raised two funds, India Property Fund and India Property Fund II, to invest in residential and hotel projects between 2006 and early-2016.
“Apollo Global is a growing investment platform in India and the transaction gives it an opportunity to significantly expand its AUM here. It also gives it access to new developer partners who are part of the JPMorgan portfolio. On its own, Apollo will continue making investments across real estate asset classes," said one of the two people mentioned above, requesting anonymity.
In November 2010, Apollo had taken over Citi Property Investors, the real estate investment division of Citigroup Inc. It had appointed Nipun Sahni, former managing director, real estate and private equity at Merrill Lynch, to head its real estate investments in India.
In early 2016, it had invested ₹ 400 crore of structured debt in Noida-based Logix Group. So far, it has invested around ₹ 1,200 crore across projects in Mumbai and the National Capital Region (NCR).
“While a few deals are in exit mode, many of JPMorgan’s real estate investments still have around four years of fund life left, which Apollo Global will now manage," the first person added.
When contacted, JPMorgan and Apollo Global spokespersons declined to comment.
It could not, however, be ascertained what role Hrushikesh Kar will have in the new set-up. Kar was the managing director and head of real estate India and real estate Asia Pacific, of JPMorgan Asset Management.
Chanakya Chakravarti, who was managing director and head of acquisitions, JPMorgan Asset Management, had resigned in late 2017 to join as managing director, India, growth markets, at Ivanhoe Cambridge, the real estate subsidiary of Canada’s Caisse de dépôt et placement du Québec (CDPQ).
In 2010, Blackstone had entered into an agreement to manage Bank of America Merrill Lynch’s Asian real estate assets and to act as the new general partner for Merrill Lynch Asian Real Estate Opportunity Fund. In the process, it also started managing BofA Merrill Lynch’s assets in India.
“The key takeaway is that just like there is consolidation in the property development industry, the same is occurring in the fund management business, too. There are fund managers who are exiting the business for various reasons and new general partners, who step in, get a fee to manage the new assets, as well as expand their AUM," said Rajeev Bairathi, executive director and head of capital markets, at property advisory firm Knight Frank India.