ASK Property Fund, the real estate private equity arm of Blackstone-backed ASK Asset & Wealth Management Group, has exited one of its investments, in which it had put in ₹200 crore four years back, with an internal rate of return (RoR) of 20 per cent.
“It was a targeted exit from the cash flows of the project,” Amit Bhagat, CEO and MD, told businessline. It was a structured debt funding done in 2019 and the investment consisted of a basket of three projects, in which QVC Realty Developers was involved. The AIF exited at ₹354 crore; 1.8 times multiples of the capital invested.
Project portfolio
Two of the projects are in Gurgaon along the Dwarka expressway. One is a joint development between QVC and Sobha Ltd., which was the development partner. The second project, located about 10 km away is a 100-acre plotted development in which QVC has a 50 per cent stake. The third project in Bengaluru is QVC Nandi Hills.
The investment was part of a ₹850-crore fund that was launched in 2017-18, and so far, it has made exits worth ₹1,000 crore, Bhagat said. The remaining will be completed in the next one year.
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Post the housing finance crisis of 2018 and Covid, the real estate sector has consolidated and the better players have survived and are thriving. “We should be happy with these returns because they are not over leveraged, they are not in litigation with the customers and they are not stuck projects,” Bhagat pointed out. He added that the healthy returns were due to the selection of projects and “the entry point with margin of safety.”
The fund is identifying possible opportunities with an investment horizon of 3-5 years in sync with the time period of completion of the project.
Investor base
The investors in the fund are high net worth individuals and family offices. Bhagat said that while so far institutional investors had stayed away considering the returns they may invest in the future.
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Another fund - ASK Real Estate Special Opportunities Fund IV with a corpus of ₹1,180 crore, launched last year is still seeing funds deployment. It has invested ₹900 crore so far across 9 deals. A third fund is in the works and the first close will be announced in due course, Bhagat said.
ASK Property Fund manages funds of ₹6,250 crore and has exits of ₹3,900 crore.