Aditya Birla Real Estate Fund

Fund Snapshot

Investment Philosophy

• By investing in equities and equity-related securities, the portfolio’s investment aim is to seek long-term capital appreciation and modest dividend income.
• Identify and invest in high-quality firms in industries with steady growth and ROE throughout the medium to long term and use Value Investing to make investment selections.

Investment Strategy of RE Structured Debt

• Geography – Concentrate on the Tier 1 metro regions of Mumbai, Bengaluru, Pune, NCR, Hyderabad, and Chennai, with more demand, liquidity, and transparent underwriting data.
• Property Type – The sponsor will also underwrite the company balance sheet and promoter position, often brownfield under construction residential and office developments that have reached financial closing.
• Investment Stage – Brownfield/greenfield projects that have received the necessary permits
• Target Companies – Top-tier developers from all around the world. Investment suggestions will be based on the relationship and credit history of the parties involved; however, investments in new connections may be made.
• Seniority – Senior secured debt with a loan-to-value ratio of up to 60% (LTV)
• Target Return – At the investment level, aim for a gross IRR in the region of 15% to 16% XIRR.
• Cash Flow Cover – Target 1.5-2.0x free cash flow minus senior debt servicing, as determined by cautious predicted free cash flows.
• Term – 30-42 months on average, with a 12- to 18-month lockout time.
• Control – Affirmative Rights: The fund’s affirmative permission would be required for key management decisions if a breach of the key covenants on control and management. Cash Flow Monitoring: An Escrow account would be set up to keep track of cash flows.