Red Fort targets over $400m for second fund

Having invested more than 80% of the capital from its debut vehicle, the New Delhi-based private equity real estate firm has hit the fundraising trail for a follow-up.

Red Fort Capital, the India focused private equity real estate firm, has launched a follow-up vehicle to its $400 million Red Fort India Real Estate Fund I, as it seeks to continue investing in India’s residential sector.
Under the terms of its first vehicle, Red Fort can raise a second fund as it has invested more than 80 percent of the existing capital commitments. Now that it has done this, Red Fort is to begin capital raising.

Parry Singh, co-founder of the company said Red Fort would approach its existing LP base for capital commitments in the first instance and is anticipating a first close by the middle of the year.

Investors in the first fund included sovereign wealth funds and insurance companies which typically made commitments north of $60 million. Singh said the fund was on course to produce a return north of 20 percent.
For the second fund, he told PERE: “Our focus continues to be residential. We have done well from our strategy of investing in value housing and have returned money from it.” Red Fort is currently invested in six cities in India, comprising Bangalore, Delhi, Mumbai, Chennai, Kolkata, and Hyderabad, but is planning to add more cities to its targets list.
Singh said the fund would not seek to deploy leverage for its investments but expects to be able to secure debt at a loan to value ratio of up to 30 percent “at the project level” if needed.
Last month, Red Fort hired Raj Inamdar as a principal in charge of creating new business initiatives in anticipation of the launch of the second fund. Inamdar joined from South Asian Real Estate Group where he was chief investment officer.