Motilal Oswal Real Estate

Funds managed

FundsStructure investmentsStatusNo. of Investments*Investments Exit*
IREFStructured Equity InvestmentsClose77
IREF IIMezzanine Close14 (including reinvestment)11
IREF IIIStructured equity / mezzanine investmentsClose246
IREF IVStructured equity / mezzanine investmentsClose10
IREF VStructured debt investments Active

*as on 13th Jan 2021

About

Motilal Oswal and Raamdeo Agrawal, founders of Motilal Oswal Financial Services Limited (MOFSL), built a successful financial services business based on the core principles of knowledge and long-term investing philosophy. MOFSL owes the success of its stock broking business to the partnership-led business model, which has unleashed the entrepreneurial spirit in its most admired franchisee network.

The two partners visualised that small and mid-cap companies would be significant beneficiaries of India’s rapidly unraveling growth story. They realised that the private equity business will facilitate risk capital to such firms and will allow them to share their experience of building MOFSL to mentor budding entrepreneurs in shaping their business dreams. Motilal Oswal Private Equity (MOPE) was thus founded in 2006 with the vision of partnering high potential mid-market companies.

Vishal Tulsyan came on board as the founding CEO. Under his leadership, MOPE has raised three growth capital funds [India Business Excellence Fund-I (IBEF-I), India Business Excellence Fund-II (IBEF-II)] and India Business Excellence Fund-III (IBEF-III)] and four real estate funds [India Realty Excellence Fund (IREF), India Realty Excellence Fund II (IREF II), India

Key staff

Pranay Vakil, Chairman at Praron Consultancy India Ltd – Pranay Vakil is the Chairman of the Investment Committee. He is the Chairman of Praron Consultancy (India) Private Limited & brings over 25 years of rich real estate experience. Mr. Vakil was the founder of Knight Frank in India and served as its Chairman. He is the Co-Chairman of the Real Estate Committee of FICCI & also serves as a Chairman of Housing & Real Estate Committee with Indian Merchants Chamber (IMC). He is a Chartered Accountant and a Lawyer by qualification and currently serves as an independent director for Godrej Properties and Deepak Fertilizers & Petrochemicals Corporation Limited.

Motilal Oswal, Chairman & Managing Director, Motilal Oswal Financial Services Ltd – Oswal is the co-founder of Motilal Oswal Financial Services Ltd and a first-generation entrepreneur. He is also the Chairman of Investment Committee. He comes with over 20 years of experience in creating and managing businesses. He has been felicitated with numerous awards and recognition -Excellent Business Achiever in Financial Services’ award by ICAI Udyog Rattan Award’ by the institute of Economic Studies, New Delhi, Rashtriya Sanman Patra’ for being amongst the top 50 income tax payers in India for the period 1995-99. Mr. Oswal has served on the governing board of the Bombay Stock Exchange and many committees of BSE, NSE, SEBI and CDSL.

Vishal Tulsyan, Managing Director & CEO, Motilal Oswal Private Equity Advisors Pvt. Ltd. – Tulsyan is the founder, Managing Director & CEO, Motilal Oswal Private Equity (MOPE). Over the last 10 years, he has built MOPE into a successful Private Equity Company in one of the most volatile economic environments. He has played a key role in driving MOPE’s success through organization-building skills, robust network and a keen understanding of strategic and financial business issues. Under his leadership MOPE is currently managing INR 2500 crore across Private Equity & Real Estate, and is one of the few Indian Funds who has shown successful exits.

Vishal has more than 18 years of experience in financial services. He was earlier with Rabobank where as a director, he was responsible for the origination and execution of structured finance, project finance, acquisition finance transactions, and private equity and M&A products. Tulsyan is a member of the Institute of Chartered Accountants of India (all-India rank holder) and was a top ranking student of the prestigious St. Xaviers College, Kolkata.

Somak Ghosh, Independent Member – Ghosh is the founder of Contrarian Capital India Partners; an early stage investor in businesses addressing issues of affordability and accessibility. He has over 20 years of experience in banking and financial services. Earlier, he was with Yes Bank as Co-Founder & Group President, Government & Development Banking; set up Yes Banks Corporate Finance, Infrastructure Finance, Realty Finance & Debt Syndications businesses. Has worked with Rabo India, ICICI Ltd., Reliance Industries & Ispat Europe in various capacities in India & Europe. He is an Advanced Leadership Fellow 2011 from Harvard University & MBA from FMS Delhi.

Sanjaya Kulkarni, Independent Member – Kulkarni was one of the promoters of 20th Century Finance Corporation Limited, which eventually became Centurion Bank and was later merged with HDFC Bank. He has over 37 years of experience in the Indian financial services space. Mr. Kulkarni is an investor in early stage companies and an advisor to various companies on strategic, financial & corporate transformation issues. He also serves as the Chairman/Director on the Boards of various listed companies like Tree House Education, Agro Tech Foods, Su-kam, Time Technoplast etc. He is an MBA from IIM Ahmedabad and a Bachelor in Technology from IIT Mumbai

Investment philosophy

Built a successful financial services business based on the core principles of knowledge and long-term investing philosophy. Firm follows QGLP investment philosophy.

Funds overview

  1. India Realty Excellence Fund (IREF)

Year of Launch: 2009

Corpus:  INR 165 Crore

Focus:  Residential projects in top cities of India

Capital Committed: 100%

Number of Investments: 7

Structure: Structured Equity Investments.

Investments Exited: All investments have been exited

Fund Status: Closed

Investment strategy

  • Focus on residential assets with compelling valuations
  • Emphasis on leveraging cyclical nature of the industry and self-liquidating nature of investments
  • Opportunistic investments in commercial and other classes of real estate assets which are underserviced
  • Focus on “Next-Gen” players which have good execution capabilities
  • Achieve superior returns by investing capital through equity and/or equity related instruments in projects
  1. India Realty Excellence Fund II (IREF II)

Year of Launch: 2013

Corpus: INR 500 Crore

Focus: Residential projects in top cities of India

Number of Investments: 14

Investments Exited: 11

India Realty Excellence Fund II (IREF II) was the second domestic scheme launched by MORE. The fund, with mezzanine structure in mind, shall focus on real estate development, predominantly investing in Tier 1 cities with a residential focus. The fund closed in March 2015.

The fund is fully raised, closed, deployed and is currently in the process of exiting its investments. The fund’s exits are based on self-liquidation or through repayment of fixed IRRs by the developer to the fund.

With the right execution of strategy and processes, IREF II has secured six full exits and one partial exit at healthy IRRs.  

As on March 31, 2018 the Fund has already returned 45% of the capital to the investors.

Investment strategy

  • Focus on residential projects at established locations
  • Partnering with established developers across top Indian cities for their mid-income residential projects
  • 1st Fund to undertake mezzanine investments when others’ were focusing on fixed coupon post approval projects
  • Able to identify the shift in goal post from “Approval Risk” to “Sales Risk”
  1. India Realty Excellence Fund III (IREF III)

Fund Size: INR 1,000 Crore

Focus: Residential Real Estate projects in Indian Metros

Average Ticket Size: INR 80 – 100 Crore

Number of Investments: 24

Investments Exited: 6

Status: Close

India Realty Excellence Fund III (IREF III) is the latest fund offered by MORE with a target to raise Rs. 1,250 Crs. The fund is focused on investing in Tier 1 cities with a residential focus. The fund aims to generate superior returns through structured transactions accompanied with significant downside protection mechanisms. The fund has accomplished to raise Rs. 1031 Crs. 

The Fund has also started deploying capital from this Fund and has deployed ~ Rs. 644 Crs till date across investments in Mumbai, Bangalore, Pune, NCR and Hyderabad.

Investment strategy

  1. City Strategy:

Fund shall restrict its investment in the top 6 cities of India – MMR, Delhi NCR, Bangalore, Pune, Chennai and Hyderabad. Investment in individual cities (except for MMR & Bangalore) shall not to exceed 40% of the fund size

  1. Project Strategy:

Investment shall largely be in residential projects which are self-liquidating in nature. In order to achieve the desired IRR, majority Investment shall be at land acquisition stage or pre-approval stage. Investment in a single project shall not exceed 25% of the fund size

  1. Developer Strategy:

The fund shall partner with an established developer with a good track record, superior execution capability and financial sound. Investment in a group shall not exceed 30% of the fund size

  1. Investment Structure Strategy:

The fund shall undertake structured equity investments and mezzanine investments. Fund plans to undertake structured equity transactions with established reputed developers in each micro market. Focus shall be to invest in mid-income housing residential projects with reasonable approval certainty. In case of mezzanine investments, structure shall be a regular fixed coupon along with equity kicker in form of inventory or revenue share in the project.

  1. India Realty Excellence Fund IV (IREF IV)

Fund Size: INR 1,200 Crore

Focus: Residential Real Estate projects in Indian Metros

Average Ticket Size: INR 80 – 120 Crore

Number of Investments: 10

Status: Close

India Realty Excellence Fund IV (IREF IV) is the latest fund offering by MORE with a target to raise Rs. 1,500 Crs. The fund is focused on investing in Tier 1 cities majorly into residential focus with established developers in the affordable / mid-income housing segment. The fund aims to generate superior returns through structured equity / debt transactions accompanied with significant downside protection mechanisms. The fund is currently in the process of fundraising and soon to announce its initial closing

The Fund will seek to raise monies from Indian and overseas investors (subject to obtaining necessary regulatory approvals) including but not limited to financial institutions, pension funds, family offices, estates, public sector banks, insurance companies, high net worth individuals, non-resident Indians (NRIs), trusts, partnerships, limited liability partnerships, body corporates,  corporates, Hindu Undivided Families, a Government body (Central or State) or an agency or instrumentality thereof and any other person permitted by law.

Investment strategy

  1. City Strategy:

Fund shall primarily undertake investments in top 6 cities of India – MMR, Delhi NCR, Bangalore, Pune, Chennai and Hyderabad. 

  1. Project Strategy:

Investment shall largely be in residential projects which are self-liquidating in nature with majority of the transactions at land acquisition stage or pre-approval stage.

  1. Developer Strategy:

The fund would invest with established and credible developers who have demonstrated good past track record, superior execution capability and strong sales expertise.

  1. Investment Structure Strategy:

The fund shall undertake structured equity / mezzanine investments. Fund plans to undertake structured equity transactions with established reputed developers in each micro market. Focus shall be to invest in mid-income housing residential projects with reasonable approval certainty. In case of mezzanine investments, structure shall be regular fixed coupon along with equity kicker in form of inventory or revenue share in the project.

Press Release as on 13th Jan, 2021

https://motilaloswalre.com/Media/press-release/-/motilal-oswal-real-estate-launches-fifth-fund/RE/9904

  1. India Realty Excellence Fund V (IREF V)

Focus: Construction finance in post-approval projects

Average Ticket Size: INR 60-80 Cr 

 Status: Active

IREF V would focus on construction finance in post-approval projects. The Fund plans to deploy the capital in mid-income/ affordable residential projects across the top 7 cities in India (Mumbai, Delhi-NCR, Pune, Bangalore, Chennai, Hyderabad and Ahmedabad) while selectively investing in commercial projects. IREF V would focus on structured debt investments with established developers and undertake 12-15 transactions of INR. 60 – 80 Cr each.

Media

It’s an event organize by the Motilal Oswal Financial Services where Vishal talks about, why the person should invest in Private Equity and also its future prospects and also talks about the investment philosophy of the company and the fund they have invested in and also profit they got from it.

Analyst questions

  1. As most of the investment managers are having more than a decade experience in investment then they must have seen the economic crisis, then how did they overcome that?
  2. What distinguishes the company from other Private Equity or Real Estate companies, so that the investors can invest?
  3. How do you know that the quality of business and quality of management are good?
  4. What is the lock-in period of the funds?

Prepared By – Kanan Agrawal, June, 2021.

Reviewed by Punit Bansal

Author

Share:

You must be logged in to post a comment.