Puravankara announces first close of Rs 750-crore alternative investment fund

[] Puravankara has announced the first close of its targeted alternative investment fund of Rs 750 crore, which the company says, will be invested in plotted developments and mid-sized mass housing projects

Puravankara has announced the first close of Rs 200 crore of its targeted AIF (alternative investment fund) of Rs 750 crore (including a green shoe option of Rs 250 crore). The company has set a target for the final close of the fund, by September 2022. The fund will invest in a mix of plotted developments and mid-sized mass housing projects under the ‘Purva Land’ and ‘Provident Housing’ brands.

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Puravankara has three brands under its umbrella (Puravankara in luxury; Provident in affordable; and Purva Land in plotted development) with presence in nine cities. A wholly-owned Puravankara subsidiary, ‘Purva Asset Management’, was formed in 2021, to create multiple financing platforms, at a time when banks and NBFCs turned wary of financing real estate developers. Keeping the huge capital inflow requirement for real estate in mind, the company set up the AIF to fund projects.

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According to Ashish Puravankara, managing director, Puravankara Limited, the AIF is aimed at new green shoots and not to leverage its existing land bank. The fund promises to share the top line with the investors and not the bottom line, with a minimum guarantee protection. “This is the first SEBI-approved AIF from the house of Puravankara and is a critical step in our long-term capital strategy. As we witness significant consolidation in the realty sector, our continued focus is to ensure sustained capital flow for our growth. This fund will create a win-win for investors and us and is part of a larger goal to manage an AUM of about Rs 2,000 crore to Rs 2,500 crore in the next five years. Many first-of-a-kind protective features have been introduced while providing a strong upside for the investors. The fund will target an IRR of around 25%,” said Puravankara.

Puravankara received SEBI approval for the fund early this year. The fund has a tenure of 5.5 years and expects to deploy the corpus within the next six months. The fund will be managed by Purva Asset Management Private Limited, which is also the fund sponsor.

Shailesh Viswanathan, fund manager and director, Purva Asset Management, said, “We, at Purva Asset Management, aim to build innovative capital platforms to ensure sustainable growth. The AIF will invest in five to six plotted and mid-sized residential projects, to provide quick cash flow and enjoy the upside through steady price appreciation. We are deploying part of this fund in two projects within the next four to six weeks.”

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The AIF Category II fund scheme is sponsored by Puravankara Ltd (contribution – 5% of fund). This insulates the investors from project cost fluctuations. It also provides periodic cash flow to investors from project launch itself.

(The writer is CEO, Track2Realty)

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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