ASK Property Investment Advisors raises Rs 520 crore for domestic realty fund

NEW DELHI: ASK Property Investment Advisors has raised 520 crore for a domestic realty fund, becoming the first fund among half-a-dozen such realty PE funds waiting in line, to raise money from rich investors in 2011. The ASK fund had originally aimed to raise Rs 1,000 crore, including a green shoe option of Rs 500 crore that is open till December.

Amit Bhagat, CEO and MD of the company, said the fund will focus on mid segment residential development and execution. "The fund is focused on asset management and risk management as its core differentiators." "In the current scenario, counter cyclical opportunity provided due to liquidity crunch and high interest rate presents a risk diversification and expansion opportunity for developers," said Sunil Rohokale, executive director of ASK Investment Holdings.

ASK had raised Rs 340 crore in 2009 after the global financial crisis, which was committed in six mid-size real estate projects. "The fund continues to look for compounding opportunities and does not prefer only an opportunistic play," Rohokale said. Around 250 investors have participated in the second fund that was launched in January this year, with average size of Rs 2 crore per investor against the minimum subscription amount of Rs 25 lakh, Mr Bhagat said.

Since the 2008 global financial crisis, three funds-ASK, Indiareit and the Aditya Birla group backed private equity firm-have raised development funds for the real estate sector, aggregating around Rs 2,500 crore. Leading PE players such as ICICI Ventures, Milestone, Kotak and JM Financial are in the midst of raising fund for their realty sector.

Some of the realty PEs that had invested in companies prior to the global crisis of 2008 could not manage to exit as many of these companies deferred their public issue plan. So these funds do not prefer to invest at the company level anymore. Rather, in order to ring fence the risk, they are investing in standalone projects.