Launch of 2nd real estate fund by Essel Finance

Essel Financial Advisors and Managers (EFAM), the private equity arm of Essel Finance, launched its second real estate fund with a target of raising upto Rs.250 crore. The real estate fund will be invested in various residential projects across cities such as Delhi NCR, Mumbai, Chennai, Bengaluru and Pune. In a statement, the company has added that it will target 6-8 transactions.

CEO – Private Equity Abhinav Bhushan said, “Current market is an opportune time for investment in a debt fund like ours as we have locked in deals at attractive rates and the interest rates are witnessing a downward pressure.”

The fund will have a four year tenor and have set a target of 21.5% internal rate of return from its investments. Considering the firm anticipates maximum demand from the mid and affordable residential segment, the fund will focus on these segments due to its capacity to offer steady returns during downward phases.

The real estate fund has received the required approval from the concerned authorities and has been set up as SEBI Registered AIF category II fund.

rashmi group

Mumbai-based private real estate company, Rashmi Group has confirmed that Essel Finance has invested in two of their Signature projects located at Mira Road and Pink City project located at Naigaon in North Mumbai. Rashmi Group has delivered 14,000 apartments and currently has over 1.5 million sq ft under construction. Property consultant JLL was the adviser for this transaction.

“The investment has been done in the form of structured debt from our ASSET-1 Fund. First tranche of Rs 40 crore has already been invested and the work on another outlay of Rs 35 crore with the group is in progress, “said Abhinav Bhushan, CEO – private equity, Essel Finance.

The strategy of the fund is to focus on the mid and affordable residential segment and this investment is in line with it. The fund is also pursuing similar investments in this segment in Bangalore, Pune, Mumbai, Chennai and Delhi-NCR markets.

Essel Finance has made two investments in Pune earlier this year, one in Maple Group’s affordable segment residential projects and another in Pinnacle Group’s mid-segment project.