HDFC Realty in talks to raise $600 mn

HDFC Realty, the private equity arm of Housing Development Finance Corporation, is in talks with the world’s largest sovereign funds to raise its fourth real estate fund.

Requesting anonymity sources close to the development say HDFC Venture Capital Ltd (HVCL), fund manager to HDFC Property Fund, will start raising its new offshore fund, with a corpus of $400-600 million, by the end of November.

The company has already started discussion with a few of the Singapore Government-owned GIC and Temasek Holdings, the Abu Dhabi Investment Authority (ADIA, owned by the government of Abu Dhabi) and Kuwait Investment Authority. ADIA manages more than $600 billion. Temasek, focused primarily in Asia and Singapore, handles $151 bn under various assets. GIC manages assets worth a little over $300 billion, according to the sources.

HDFC entered the private equity business with HDFC Property Fund in 2005. HVCL manages two domestic funds, a Rs 1,000-crore HDFC India Real Estate Fund and a Rs 464-crore IT Corridor Fund. Another offshore fund launched under the HDFC banner was the $800-million HIREF International.

HDFC’s domestic fund has invested in residential projects such as Pune-based Vascon Forest Country, Khandala-based Signature Bungalows and Chennai-based Metrozone. It has invested in 18 projects, of which 10 exits have been made so far. Of 17 investments made by the offshore fund, HDFC has exited one investment (Mumbai-based Lodha Excelus) so far.