ICICI Venture Funds Management, India’s largest private equity firm, plans to float a $2 billion real estate fund next month, Renuka Ramnath told India’s Business Standard newspaper Tuesday.
The fund, which will be the largest in the country when it launches next month, will have a ten year lifespan, and the firm plans to invest all of the money within three years, according to reports. The fund will raise money from both domestic and international investors, and will target commercial and residential developments in India’s 12 largest cities. The fund will also acquire land.
Last year ICICI launched a $500 million real estate fund, of which it has reportedly already invested 70 percent. The firm has since then expanded its strategy to buy and manage completed commercial and residential properties.
ICICI is just the latest firm to hope to cash in on India’s expanding real estate development by floating a real estate fund. JP Morgan, Citigroup, Morgan Stanely, and HDFC have all also established such funds since rules on foreign investment in Indian development were eased in 2005.
According to an estimate by Moody’s Investors Service in June, India's real estate sector may reach $90 billion by 2015 from $12 billion in 2005.
ICICI Venture was set up in 1987 and has $2 billion under management, including $550 million in a real estate fund. The firm also has a 50-50 joint venture with Tishman Speyer Properties called TSI Ventures, which was launched in 2005 to invest in Indian property.