News: Duke IndiaCo launches $300-m realty fund

(BL 10/09/2006) Pune - Private equity investment firm Duke IndiaCo has announced the launch of a realty fund with an investment size of approximately $300 million, raised exclusively from overseas investors including pension funds and large institutions.

The fund will invest in real estate opportunities in the industrial/commercial, residential and retail categories, Gopal Patwardhan, Managing Partner, Duke IndiaCo, said.

Chalking out the firm's investment strategy for the fund, Patwardhan said it would invest in Tier II and Tier III cities in the Mumbai-Hyderabad-Bangalore triangle where it will focus on residential projects targeted at the low and medium income group, with apartments costing between Rs 10-20 lakh.

"This will minimise our downside risk. India has a huge middle class population and that is where the growth is,'' he said.

Industrial segment

In the industrial segment, the company will focus on investing in, among other things, development of special economic zones, Patwardhan said, adding that this would be where the future employment will come from as manufacturing comes of age.

Duke IndiaCo is in advanced stages of negotiations for at least 5-6 projects including one in Pune and Tamil Nadu and a couple of them in Tier III cities and is also investing in a village resort in a south Indian city. Also on the anvil is an industrial-residential project near Delhi. "The $300 million will be invested in 15-20 projects over the next 24 months,'' Patwardhan said.

Meanwhile, the company also plans to tap the retail segment of the realty business and will focus on specialty malls.

Other investments

Currently, Duke IndiaCo has four operational funds with $475-million committed capital under management. Over the last three years, it has deployed over $30 million in listed and privately held companies and has invested in 18 companies.

Patwardhan said the firm would also focus on private companies in the auto ancillary sector industry and also on special opportunity infrastructure projects in India with investments in construction projects for roads and bridges, power plants and SEZs.