ICICI Venture floats $250 m realty fund

Private equity fund ICICI Venture, a wholly-owned subsidiary of ICICI Bank, has announced a $250 million fund — India Advantage Fund III — which will be a dedicated real estate fund. The focus of the fund will be to develop, acquire, lease and sell office buildings, residential premises and retail spaces. Through this fund, ICICI Venture has formed a new practice of real estate and property investment management activities.

The ICICI move comes in the wake of HDFC recently launching a real estate fund in association with SBI. It launched its first scheme — HDFC India Real Estate Fund — with a target of Rs 750 crore. “The first phase of $200 million will be closed by the end of this month where a number of institutional investors and investors from our current funds will make their contribution. The fund is expected to raise in excess of $300 million by the time it finally closes,” ICICI Venture Managing Director and CEO Renuka Ramnath told reporters.

She added that the funds will be distributed in such a way that up to 25 per cent of the total capital will be invested in a single metro area and no more than 15 per cent of the capital in a single metro project. The company’s business model will be set up in such a way that the real estate fund initiative will function as a self-sustaining standalone entity. “ICICI Venture has appointed specialised professionals to manage the funds,” said Ramnath.

Meanwhile, close on the heels of announcing a realty fund, ICICI Venture has signed a 50:50 joint venture (JV) with US-based Tishman Speyer Properties (TSP). ICICI Venture plans to leverage on the JV for development of those real estate projects that are approved for foreign direct investment.