Cerestra to raise $300 million edu-infra fund
Cerestra also plans to launch an infrastructure investment trust (InvIT) sometime soon, said managing director Jasmeet Chhabra
Bengaluru: Private equity fund Cerestra Advisors Ltd is raising a $300 million offshore education-infrastructure fund, including a $100 million green-shoe option, which it will invest in school buildings that are part of a large chain of operators.
It also plans to launch an infrastructure investment trust (InvIT) sometime soon, said managing director Jasmeet Chhabra.
Cerestra was acquired by London-based asset manager The Capital Partnership (TCP) from Religare Global Asset Management on 1 August.
Its first fund—Cerestra Edu-Infra Fund—was a domestic alternate investment fund (AIF) that raised around Rs1,000 crore and bought out income-generating assets in the education-infrastructure space.
“The offshore fund offers an avenue to school owners to monetise their assets to unlock capital for growing their operations profitably, in an asset light model and without the need to raise debt,” Chhabra said.
“Cerestra’s initiative is to organise the sector by creating an institutional market for sale and lease back of school infrastructure in the country. This in itself is a huge opportunity. As an extension, we will be adding on-campus student housing to our portfolio to eventually become a full service education infrastructure asset owner,” Chhabra said.
The InvIT will be the first-of-its-kind dedicated education InvIt and will help create a new source of capital complimentary to school operators that would help faster roll-out of schools to cater to the increasing demand gap in the country for quality education, he said.
InvITs are trusts that manage income-yielding infrastructure assets, typically offering investors regular yields and a liquid way of investing in infrastructure projects. They bring in more foreign investment in the sector, reduce the burden on bank debt and let developers unlock the value of such assets.
InvITs have failed to create much excitement on the bourses so far. Shares of both listed Indian InvITs—IRB InvIT Fund and India Grid Trust—have underperformed the benchmark Sensex since their listing last year, Mint reported in March.
Apart from education, Cerestra also invests in the lifesciences segment. In 2016, Cerestra along with Singapore-based Lighthouse Canton bought Alexandria Knowledge Park in Hyderabad, with the objective of building and creating a large cluster of third party-owned research and development infrastructure at a single location.
It has so far developed and leased 5.5 lakh sq. ft to different R&D clients and has also acquired an additional 1.7 lakh sq. ft of built-up space.
“We are now focused on creating a national network of lab space infrastructure across lifesciences hubs in Hyderabad, Bengaluru, Navi Mumbai and Vizag with a target portfolio of over 5 million sq ft in five years, with the target of eventually listing it as a premium life science infrastructure real estate investment trust,” Chhabra said.
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