Infinite India Investment Management, a private equity initiative anchored by the JM Financial Group, has launched a real estate fund. The fund plans to invest $400 mn in residential, commercial and retail sectors. Kartik Sharma, the Chief Investment Officer at Infinite India reveals that his decision is based on the fact that fundamental demand drivers in the realty sector are very strong, with respect to job creation and housing demand.
Kartik Sharma’s view of the Indian real estate market and opportunities:
On avenues of investment – Tier I and Tier II markets, where they have already made 5 investments; with capital being relatively tight in the market, in terms of debt capital and IPO action likely to be relatively slow for a little while, optimistic about private equity funds in providing finance for various real estate development projects
On direct participation in projects or backing existing companies planning to come into IPOs –done both so far and will actually continue to do both; invested in both project level investments as well as entity level deals
Time horizon for completely investing $400 mn and kind of returns expected – to invest the capital in the next 2-3 years; since investing in an emerging market illiquid security, expecting reasonable returns somewhere in the neighbourhood of 30%
On being bullish on the real estate sector given the inflationary pressures and the regulatory problems – fundamental demand drivers in terms of job creation and in terms of housing demand are very strong; also nascence of the Indian market with lots of pockets of inefficiency as well as in-house good expertise in terms of deal structuring
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