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Motilal Oswal Real Estate achieves first close at INR 650 Crore for fifth realty fund

Motilal Oswal Real Estate (MORE) has announced the first close of India Realty Excellence Fund V (IREF V), its fifth real estate fund. The Fund, launched with a target corpus of INR 800 Cr has received commitments aggregating INR 650 Cr. Till date, MORE through its real estate funds and PMS/NCD investments has funded 89 projects via 68 investments and successfully exited 33 investments. With IREF V, MORE’s cumulative AUM is now over INR 4,400 Cr.

IREF V will focus on providing senior secured debt in post-approval projects. The Fund plans to deploy the capital in mid-income/ affordable residential projects across the top 7 cities in India while selectively investing in commercial projects. IREF V would undertake 12-15 transactions over its entire fund life.

This Fund has been raised from high net worth individuals (HNIs) and family offices. The Fund is set up as an alternative investment fund (AIF Category II).

MORE is a part of Motilal Oswal Private Equity (MOPE), the alternative investments platform of Motilal Oswal Financial Services Limited. The cumulative AUM under MOPE is more than INR 7,500 Cr.

Mr. Vishal Tulsyan, MD & CEO, MOPE said “We believe that the realty sector is currently at an inflection point. With this fund, our cumulative private equity AUM has crossed USD 1 bn and real estate forms a key part of that AUM. We will continue to strengthen our position as a real estate investor by capitalizing on such diverse opportunities over years to come.”

Mr. Sharad Mittal, Director & CEO of MORE said “With this fund, we have repositioned ourselves to cater to capital requirements throughout the project lifecycle providing a complete financing solution and becoming the preferred financial partner for real estate developers. We have raised INR 650 Cr. for the fund within 3 months of launch and we would like to thank our investors for reposing faith in our investment capability.”

“There has been a huge gap in construction finance available in the sector over the last two years pursuant to the NBFC crisis and now the COVID pandemic. The real estate sector has gathered a lot of momentum during the last 6-7 months on the back of bottomed-out prices, peak affordability, historically low mortgage rates, Govt. incentives and increasing emotional value of home-ownership during the pandemic. Several developers have clocked record sales in the last two quarters of FY 2021. However, liquidity is still a concern which is where this fund will help our developer partners.”

“We have already concluded our first investment in IREF V with Shriram Properties in Bangalore and have a strong pipeline of deals that we are currently evaluating.”

“We plan to complete the fund raising and close the fund in a couple of months.”

MORE’s second fund, IREF II, which achieved its final close in 2015, has till date made 14 investments and secured 11 exits at an investment level IRR of 21.3%. The Fund has returned ~126% of the money back to its investors.

MORE’s third fund, IREF III, which achieved its final close in 2017, has till date made 24 investments and secured 8 exits at an investment level IRR of 22.6%. The Fund has returned ~52% of the money back to its investors.

MORE’s fourth fund, IREF IV, which achieved its final close in 2020, is currently under deployment and has till date made 13 investments and secured 1 exit at an investment level IRR of 21%