Saffron Asset To Launch Three New Funds

Saffron Asset Advisors, a private equity player, is planning to launch three new funds in hospitality, logistics and infrastructure early on 2010. Ajoy Veer Kapoor, founder and managing director, Saffron Asset Advisors told FE, “We are planning a five hundred million dollar infrastructure fund, and will introduce two hundred million dollar hospitality and logistics funds. We will source funds through foreign direct investments (FDIs).”
The company plans to go into into real estate deals in cities such as Mumbai, Delhi, Tirupur and Vishakhapatnam, among others, and will hold talks with real estate foremost like Unitech, DLF, Indiabulls and the Lodha Group.
With the 30% fall in the capital markets since January this year, more and more firms are looking at private equity as an option for fund-raising source. During the first seven months of 2008, PE firms invested $7.44 billion across two hundred forty eight investments in India. PE firms had invested $14.33 billion during whole of 2007, according to Venture Intelligence, a research service focused on private equity and venture capital activity. According to Kapoor, The Saffron India Real Estate Fund I, launched in February 2008, is raising a $350-450 million unlisted fund, with a hard cap of five hundred million dollar. It has done its first close on April 3, 2008 with an anchor investment of seventy five million dollar from Standard Life, UK. It is expected to close by the end of 2008. “Following the closure of the fund, Saffron would come out with more funds and invest in real estate and related areas like infrastructure, logistics, warehousing, hospitality and healthcare,” Kapoor added. Saffron Asset Advisors currently manages over four hundred twenty five million dollar and specialises in real estate investments. Kapoor added that since the past one year and eight months, the private equity firm has entered into at least sixteen deals.

One Comment

  1. Posted September 2, 2008 at 5:17 am | Permalink

    Even before the globally-popular real estate mutual funds (REMF) take off here, RBI has raised a red flag. It has argued that the funds would lead to circumvention of foreign direct investment (FDI) in real estate that places restrictions on foreign investors. Although 100% FDI is allowed in realty projects on the automatic route, the conditions have to be adhered to. The banking regulator has said it amounted to indirect flow of FDI in violation of the spirit of the conditions laid down by the government. RBI now wants the government to take up the issue with market regulator Sebi which had issued the guidelines on REMFs about two months ago. As per the Sebi guidelines, REMFs can directly invest in real estate, in mortgage-backed securities, securities of companies engaged in dealing in real estate assets or in undertaking real estate development projects and other securities. However, it has mandated that at least 35% of net assets of the scheme should be invested directly in realty assets. The much-awaited scheme has not found takers but some fund houses are working on the scheme. RBI’s concerns about flow of foreign investment in realty are not new. It had earlier written to the government to make Foreign Investment Promotion Board’s clearance mandatory for FDI into the sector.For more view-

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