HDFC AMC: To Launch Real Estate Fund Soon

HDFC Asset Management (AMC), backed by HDFC & Standard Life Investments, is looking at launching a real estate fund early 2013.

Though sources put the fund size at about Rs. 1,500 crore

Mr. Milind Barve, MD, HDFC AMC, Said, ''The company has not yet decided the total corpus to be raised. We are already exiting our investments with good returns. We believe the performance of the previous fund to be strong. Now, we are well positioned to launch a new fund”

HDFC AMC had last raised a Rs. 3,500 crore real estate fund and is already exiting its investments from that fund.

Barve said , '' The AMC will launch a smaller sized fund without specifying why, in the sector though sources say most fund managers are likely to go for smaller-sized funds, due to falling appetite from investors for real estate investors. Though the AMC had raised funds through portfolio management services (PMS), this time, it is raising funds under the new alternative investment fund (AIF) guidelines of the Securities and Exchange Board of India (SEBI). We have applied to SEBI under the new guidelines & are awaiting approval”

According to a main executive with a fund management company, HDFC has applied for approvals under Category - II, which means the funds are not meant for investments in infrastructure, social sectors &  hedge funds. “They have specifically applied for real estate,” the executive said. The fund manager can invest in debt & equity instruments under Category - II funds.
According to sources, Reliance Asset Management & Motilal Oswal Financial Services have also applied for Category - II funds from market requlator SEBI.

“There is no channel available to raise funds now. All fund managers have to go under alternative investment fund guidelines of SEBI. You can not do PMS or VCF (venture capital funds) structures anymore,” said the chief executive of a fund management company.

Recently, HDFC PMS exited the housing project of Mumbai - based Runwal Group by selling 50% in the project for Rs. 250 crore.

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