Bengaluru: At a time when global geopolitical tensions are making foreign investors cautious, Neo Alternative Asset Managers is doubling down on domestic credit with plans to raise ₹1,500-2,000 crore for its maiden real estate fund, its managing director Kaushik Desai told Mint in an interview. The category-II alternative investment fund (AIF) will largely offer credit to residential real estate developers across tier 1 and tier 2 cities, he said.
Earlier this week, Neo Alternative Asset Managers said it had ventured into real estate, bringing aboard Kaushik Desai, Vinit Prabhugaonkar, and Vimal Jangla, the former senior leadership team at Walton Street India, to anchor its real estate investment platform.
The three bring with them more than two decades of experience in real estate investing, asset management, and structured financing. During their tenure at Walton Street India, the team managed and advised on more than $650 million across more than 100 projects, successfully exiting a major portion of those investments with strong internal rates of return (IRR).
The alternatives arm of Neo Group operates across private equity, private credit, and infrastructure (real assets). Neo Group, a wealth and asset management firm based in Mumbai, is backed by Peak XV Partners, Japan’s MUFG, New York’s Euclidean Capital, and TVS Group. It has ₹1 trillion of assets under management (AUM).
“We are still finalising the strategy of the first real estate fund. We plan to launch it this year after the necessary approvals. The fund's aim is to offer experienced asset management and deliver consistent risk-adjusted returns to investors,” Desai told Mint.
AIFs have significantly transformed real estate financing in India, offering a crucial lifeline to projects through funding and unlocking new opportunities for developers.
As per property advisory Anarock Group’s estimates last year, the real estate sector accounted for the largest share (15%) of cumulative net AIF investments, with ₹73,903 crore invested in real estate out of a total of ₹5,06,196 crore across sectors, as of December 2025.
Filling the gap
Neo is entering the real estate market to address a widening credit gap, as traditional banks remain wary of funding land acquisitions and early-stage construction for mid-sized players. While developers are hungry for expansion capital, Desai noted that the demand is being met by a healthy supply of private capital, which has stepped in where institutional lending has tightened.
“The markets are getting slower due to the geopolitical environment. We will be raising capital for the fund from domestic investors. Though investors are cautious today, Neo has a good track record,” he added.
Within real estate, Neo will start with a residential-focused fund, after which it plans to invest in logistics, commercial, and special-situation assets.
“Real estate was a missing piece. It will be the fourth asset class for Neo after private credit, private equity, and infrastructure (real assets). Many mid-market developers are still short of capital, and Neo wants to be at the forefront by adding a lot of value,” said Hemant Daga, CEO of Neo Alternative Asset Managers and co-founder of Neo Group.
Neo’s entry follows a record-breaking 2025, in which capital inflows into India's real estate sector hit an all-time high of $14.3 billion, registering a 25% year-on-year growth, according to estimates by property advisory CBRE India in January. Land and project development sites dominated the investment landscape last year, attracting more than 46% of total inflows, followed by investments into built-up office assets.
India's real estate boom has prompted developers to buy land, launch projects and step up construction, thereby expanding the need for consistent capital. Developers typically depend on banks for construction finance only.
“The depth of domestic capital, complemented by steady foreign participation, positions India well for continued momentum in 2026," said Anshuman Magazine, chairman and CEO for India, South-East Asia, the Middle East & Africa at CBRE.