Amplus Realty Fund – II, the second real estate focused fund of the Lalbhai Group-led Amplus Capital, has achieved first closure with total commitment of Rs 200 crore of the total targeted corpus of Rs 300 crore. The entire fund raising is expected to be wrapped up soon, the fund said in a release.

The fund was launched recently and is among the few funds focused on early-stage equity investments in mid-sized residential real estate projects with execution period of 36-42 months. The fund will invest for majority stake within a ticket size of Rs 20-40 crore per transaction in major metros.

 “Many established developers are traditionally averse to high-cost debt. Further, they are looking for patient equity funding for their new projects. However, they are finding it difficult because there are just a few of funds in this space and since most of the funds are focusing on debt/mezzanine funds,” Anuranjan Mohnot, Managing Director, Amplus Capital Advisors.

Amplus Realty Fund – I, a Rs. 135 crore fund raised in 2013, has invested across eight projects in Bangalore, Chennai, Pune, and Ahmedabad, with developers including Shriram Properties, XS Real Properties, and Assetz Homes.

“Although contrarian, the current strategy has been rewarding to the first fund investors wherein the fund has completely exited in one project (48% IRR and 2.4x multiple) and has made four partial exits out of total eight investments,” Mohnot said.

 “Raised in 2013, the first fund has returned an amount equivalent to 50% of the capital commitment within three years of the fund’s life and is expected to return the entire capital by the end of this calendar year, with returns in the next 18-24 months. The fund is expected to deliver 25% IRR at the fund level.”

Commenting on the fund raising, Jayesh Shah, Co-Founder of Amplus said “We are happy to receive extremely positive response from our investors and are glad to have more than 65% of investors of Amplus Realty Fund – I participating in the new fund with increased commitments. We expect the participation level to increase by the final closing of Fund II. This has been a consequence of establishing a strong track record in our first fund with profitable and visible exits. We look forward to scale up this platform gradually.”

 Source: The Economic Times