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Construction : Web Exclusive | April 2013 | Source : Construction Update

Essel Group launches Rs 1,000-cr realty fund

Subhash Chandra headed $4-billion Essel Group has launched a Rs 1,000-crore real estate private equity (PE) fund as part of its asset management foray. The fund will have a corpus of Rs 500 crore, with an option to have an additional Rs 500 crore. The company's media company Zee Entertainment is the principal sponsor and anchor investor in the PE fund.

Zee has put in Rs 100 crore and Chandra’s family office trust gave Rs 100 crore as part of the initial closure of the fund, which took place last week, said Amit Goenka, Managing Director and Chief Executive of Essel Financial Services, the new financial services arm of Essel Group. The group got a licence for the fund called ‘India Asset Growth Fund Series I’, which will essentially do debt funding for the residential projects in top six metros, said Goenka.

Goenka stated that the company will do last-mile funding and bridge financing facilities to developers and target 20-22 per cent internal rate of returns from its investments. The group is also looking to launch an offshore fund of $100 million in the next three-four months to augment the first fund.

After Series I, which is focusing on residential assets, the group is also looking to launch Series II sometime next year, which will invest in education assets. The Essel Group has appointed a six-member investment committee and a 12-member investment committee to manage the fund.

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