Piramal, IIFL Wealth create 2K crore fund

New Delhi: Piramal Group and IIFL Wealth Management on Wednesday said they have set up Rs 2,000 crore corpus for last-mile funding in real estate projects across major cities.

Piramal and IIFL Wealth Management announced a "co-investment on an Alternative Investment Fund (AIF) platform to fund select advance stage / last-mile real estate projects across Tier-1 cities in India".

This AIF with a target size of Rs 2,000 crore will be used to provide capital to tier-I developers in key markets, the company said in a statement. Real estate sector is facing multi-year slowdown, especially in housing segment, and developers are cash-starved following liquidity crisis in non-banking finance companies, which have been a major source of funding for builders in the last few years.

"The market today presents many opportunities for last-mile finance across projects that require a minimum amount of gap funding for completion," the statement said. Piramal Group is engaged in primary development as well as wholesale funding in real estate.

IIFL Wealth is one of the leading wealth managers in the country, with aggregate assets of around Rs 1,70,000 crore under management, advice and distribution. It has more than 950 employees and presence in 6 major global financial hubs and 23 locations in India.

"The creation of this AIF is in line with Piramal Group's strategy to build newer platforms for co-lending with liked-minded reputed institutions. We will initially seed the fund with existing loans from Piramal Group's portfolio, while continuing to explore quality deals from the market in future," said Khushru Jijina, Managing Director, Piramal Capital & Housing Finance Ltd.