India is viewed by many as having great potential for real estate investment, with both domestic and international firms raising private equity real estate funds targeting the region. In the July edition of Real Estate Spotlight Preqin examined India-based private equity real estate fund managers.
In 2008, five private equity real estate funds were raised by Indian firms receiving aggregate commitments of $2.8 billion and to date in 2009 two funds have closed with aggregate commitments of $353 million. The average size of private equity real estate funds raised by India-based firms has increased steadily in recent years, from an average of $147 million in 2005 to an average of $532 million in 2008. Amongst the largest Indian fund managers are IL & FS Investment Managers, which has raised a total of $1.4 billion from its real estate vehicles, and GRIHA Investments which has raised a total of $1 billion. There are currently six real estate funds in market which are being managed by Indian firms, which are seeking an aggregate $1.9 billion in capital commitments.
As with the private equity real estate industry as a whole, fundraising for India-based fund managers in 2009 appears to be a challenging prospect. It seems likely however, in a country with huge potential for real estate investment, that Indian fund managers will increase the levels of capital they raise in the medium to longer term.
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