DHFL launches real estate fund to raise Rs. 200 crore [Jan 2012]

ArthVeda Fund Management (AVFM), a fund management arm of Dewan Housing Finance Corp. (DHFL), one of the leading mortgage finance companies launched its second real estate fund – ArthVeda Star. The fund, which is open for domestic institutions and high net-worth individuals aims to raise Rs.200 crore, with a greenshoe of Rs.100 crore; and will invest in greenfield residential projects.
ArthVeda Star Fund plans to invest in middle income housing projects (Rs.15-40 lakh per unit), with 75 per cent of its investment in 16 tier-II and tier III cities and metro outskirts across India. The projects will be sold at prices ranging from Rs.2,000 to Rs.4,000 per sq. ft.  The investment ticket size of the fund deployment will be between Rs.5 crore and 20 crore with investment duration of 24-36 months and a maximum extension of 18-24 months. The fund aims to invest in equity or equity like instruments in Special Purpose Vehicles (SPVs), having an active control of each SPV with an ownership of between 51 per cent up to 75 per cent.
Commenting on the launch of ArthVeda Star Fund, the second real estate fund, Bikram Sen, CEO, ArthVeda Fund Management said, “Considering the high potential demand in middle income housing segment in tier II and tier III cities in India, we have launched ArthVeda Star Fund that will offer domestic institutions and high net-worth individuals an opportunity to invest in smaller markets in India, leveraging DHFL group’s expertise.”
“Our first real estate fund has made 6 exits with IRRs ranging from 20 to 45 per cent and is currently invested in 7 projects. With ArthVeda Star Fund, we expect nearly 30 per cent returns from our investments”, he further added.

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