Bengaluru: Piramal Group and IIFL Wealth Management Ltd on Wednesday said that they will co-invest in an alternative investment fund (AIF), which will back projects that are at an advanced stage and need last-mile funding.
The AIF with a target corpus of ₹2,000 crore, will provide capital to established developers in key cities.
The market today presents many opportunities for last-mile finance in projects that require a minimum amount of funding for their completion, Piramal said in a release.
“The creation of this AIF is in line with Piramal Group’s strategy to build newer platforms for co-lending with liked-minded reputed institutions. We will initially seed the fund with existing loans from Piramal Group’s portfolio, while continuing to explore quality deals from the market in future," said Khushru Jijina, managing director, Piramal Capital & Housing Finance Ltd.
This will see Piramal Group facilitating external capital (on a fund or co-investment basis) alongside its lending business and will enable it to continue to further grow the lending business through a new co-investment or co-origination model, the company said.
“Piramal’s deep domain expertise in real estate and IIFL Wealth’s ability to seize the best market opportunities have resulted in well-structured investment idea which will provide clients an ideal risk-adjusted return," said Karan Bhagat, founder, MD & CEO, IIFL Wealth Management.
Finance minister Nirmala Sitharaman recently announced setting up of a ₹25,000 crore alternative investment fund to provide last-mile funding for stalled housing projects. According to the government, there are around 1,600 stalled projects with 458,000 incomplete housing units. While the government will initially pump in ₹10,000 crore, it plans to raise the remaining capital through several other institutional investment firms and sovereign funds, including State Bank of India and Life Insurance Corp. of India.