HDFC to launch $600-m housing fund, NIIF may commit $100 million

Mortgage lender HDFC is set to launch a $600-million equity fund, targeting investments in middle income, urban and affordable housing. Of the total corpus, the National Infrastructure Investment Fund (NIIF) is in talks with HDFC to commit $100 million.

To be managed by its real estate investment advisory arm HDFC Capital Advisors, this will be the lender’s second equity fund in the housing space. The proposed fund will be smaller than HDFC’s first fund of $1 billion which successfully completed fund-raising in December 2017, with over half the amount coming in from Abu Dhabi Investment Authority and parent company HDFC.

Sujoy Bose, CEO of NIIF, said discussions are going on with HDFC. He said, “We are in advanced discussions with HDFC to commit $100 million to this fund and hopefully it will be finalised soon, in the next few weeks.”

A sovereign fund from the United Arab Emirates (UAE) is believed to be among other investors in the proposed housing fund, which will seek to invest in unlisted real estate development companies with a view to growing these firms and offering them to investors via public offerings.

Bose said the NIIF is in discussions with a number of fund managers to provide venture capital funding across domains within the infrastructure sector. “We are also in advanced discussions with a number of fund managers for investments in a number of different sectors and are looking to develop more opportunities.”

On June 25, the NIIF said it received a commitment of $200 million from China-led Asian Infrastructure Bank to invest in a fund of funds.

For the NIIF, too, this is its second equity fund in the infrastructure sector. In April this year, the NIIF partnered with the UK government to launch Green Growth Equity Fund (GGEF), an alternative investment fund that was registered with the Sebi.

The NIIF and the UK government committed £120 million (about $160 million) each for the fund which is being managed by EverSource Capital, a joint venture of private equity firm Everstone Group and Lightsource BP. GGEF’s mandate is to invest in clean energy and clean transportation as well as sanitation and waste management.

HDFC Bank