Wednesday, January 24, 2007

Credit Suisse, Sun-Apollo realtly funds enter India

Economic Times reports Credit Suisse's $1b to tap Indian realty

NEW DELHI: Zurich-headquartered Credit Suisse, a leading financial house of the world, is giving final touches to a dedicated $1-billion fund for investing in the booming real estate sector in India. The India fund is expected to be announced early in the next fiscal.

US-based Financial services giants Goldman Sachs and Morgan Stanley have managed a strong foothold in the real estate market in India. While Morgan Stanley Real Estate fund has struck a few large transactions in the space, Goldman Sachs is planning to make an investment of $1 billion.

According to sources, Credit Suisse’s $1-billion investment in real estate will be brought in in a phased manner by 2010 and will focus on commercial space. “The financial plans to build a real estate portfolio with an asset value of around $1 billion over the next 3-5 years.

High on its priority list are large-format retail malls, two-star and three-star business hotels, healthcare and multi-use office-cum-residential complexes,” a source told ET.

When contacted, a spokesperson at Credit Suisse’s Zurich office said: “We do not comment on rumours. If we would set up an India real estate fund, it would be announced by a press release.”

Sources said the fund will primarily pick equity in ongoing big-ticket projects or those looking for second round of funding to complete their partially operational projects.

The fund is unlikely to park money in start-up projects, the sources added. The fund is also keen on acquiring management stake in some projects post completion. Typically, after the financing of the project, financiers exit the project by selling the entire stake.

Credit Suisse is a 150-year-old company providing a gamut of financial services, including private banking, investment banking and asset management.

Financial Express reports SUN-Apollo Ventures Ltd has announced the closure of its $630-million SUN-Apollo India Real Estate Fund, which will pursue real estate development and investment opportunities in India. SUN-Apollo Ventures is a joint venture between the SUN Group, an Indian business and investment group principally owned by the Khemka family with operations predominantly focused on India and the countries of the former Soviet Union, and Apollo Real Estate Advisors, one of the most active global real estate investors and fund managers.

The fund was launched in April 2006 and had its first closing in August. Investors include , US, European and Middle Eastern institutional investors, multilateral agencies and high net worth individuals.Chetan Dave, MD, SUN-Apollo , said, “The dramatic growth in India's economy is generating significant demand for all forms of real estate, ranging from offices to shopping centres.”

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