JPMorgan unit to exit maiden India-focused real estate fund

Mumbai: JPMorgan Chase and Co.’s real estate investment arm is preparing to exit all four remaining investments made from its first India-focused realty fund, two people aware of the matter said.

In 2006, JPMorgan Asset Management had raised $360 million for its maiden real estate fund in India called JPMorgan India Property Fund. The fund was raised from institutional investors and high net-worth individuals (HNIs) across global markets.

JPMorgan Asset Management will exit investments in Bengaluru-based Nitesh Estates, Singapore-headquartered Assetz Property Group, Mumbai-based Vaswani Group and Pune-based Kolte-Patil Developers Ltd, one of the two persons cited above said on condition of anonymity.

JPMorgan Chase and Co., which halted its real estate investments in India last year, saw the exit of Chanakya Chakravarti, managing director of global alternatives, Real Estate Asia said last month. Unlike other real estate funds which sell all investments from previous funds to a single buyer, JPMorgan is planning to sell them in separate deals and will choose bankers for each mandate, said the second person, also on condition of anonymity.

“JPMorgan Asset Management has a long-standing presence in Indian real estate, with an established on-the-ground team in place since 2006. We continue to be focused on driving results for our clients, maximizing investment performance and providing exceptional client service,” said a JPMorgan spokesperson. Mails sent to spokespersons at Nitesh Estates and Kolte-Patil Developers went unanswered.

Assetz Property Group and Vaswani Group could not be immediately contacted for comment. In 2011, JPMorgan had invested about $40 million in Nitesh Estates by acquiring a stake in a special purpose vehicle (SPV) developing various projects in Bengaluru. The Mumbai-based Vaswani Group also raised about Rs100 crore from JPMorgan for its residential project in Bengaluru in 2014. In 2015, Pune-based Kolte-Patil Developers raised Rs120 crore ($18 million) through co-development agreement with an affiliate of JPMorgan Asset Management for its redevelopment project, Jay-Vijay Society, in Vile Parle in Mumbai in 2015. Last year, the fund had invested about $35 million in Assetz Property Group for its residential project in Bengaluru.

“Most of the historical investments in residential asset class made during 2006-07 are equity investments which are still struggling to make exits given the way market evolved — global meltdown, developers unable to complete work, etc.,” said Shashank Jain, partner, transaction services, PricewaterhouseCoopers (PwC) India.

Also, the investment decisions of global funds are made according to the deployment opportunities available globally, which may not allow the investments in markets like India, unless it is a country or region-specific fund, he added.

Besides JPMorgan India Property Fund, many other funds which deployed money since 2006-2007 are also looking to sell entire portfolios to potential buyers and have given mandates to investment bankers.

Kotak Realty Fund, a part of Kotak Investment Advisors Ltd (KIAL), is all set to sell assets from two real estate funds raised in 2007, and is in talks with US-based Blackstone Group LP and two Canadian entities, Mint reported in October.

IL&FS Investment Managers Ltd (IIML), a unit of Infrastructure Leasing and Financial Services Ltd (IL&FS), is in talks with funds such as Blackstone to sell its IL&FS India Realty Fund I, another Mint report said in July. One of India’s first real estate-focused funds, IL&FS India Realty Fund I was launched in 2005 and made 17 investments, of which it has exited six.


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