ICICI Venture to Launch 1,000Cr Real Estate Fund

ICICI Venture is launching a Rs 1,000Cr real estate fund, which will focus on commitments from domestic investors. Amidst a series of departures of senior officials, India’s leading private equity firm ICICI Venture Funds Management Co. Ltd is in the process of launching a relatively smaller Rs 1,000 crore real estate fund, according to two sources close to the development. The plan for the scaled down real estate fund comes at a time when the firm is facing hurdles in raising commitments from investors for some of the fund initiatives it announced earlier which included a $1-1.5 billion real estate fund.

The firm, which manages more than $2 billion currently, had been in the news with its long time MD and Chief Executive Renuka Ramnath quitting in April. Ramnath was replaced by banker Vishakha Mulye, who was till then an Executive Director of ICICI Lombard General Insurance Company. The change at the top deck of ICICI Venture has reportedly raised concerns among many investors – mainly foreign – and that is considered one of the reasons for the firm’s plans to launch a smaller fund.The fund plans to mobilise 90% of the target corpus from domestic investors, both institutional and high-networth individuals (HNIs), sources told VCCircle. Most PE firm have been raising capital abroad, while ICICI Venture is turning to domestic investors so that it can use ICICI Bank’s distribution muscle to reach out to the local investors.

This fund will also be an initiative from scratch by the new leadership. Sources said that a successful launch of the real estate fund will help infuse confidence in foreign investors after which it can go in for a larger general private equity fund, probably with a target corpus of $1 billion, sources added. The fund is about to be launched and will hit the roads in coming weeks.