Mumbai: Real estate veteran Anuj Puri, who quit as the head of property consultant JLL India earlier this year, is close to buying two private equity funds worth Rs460 crore from his former employer, two people aware of the development said.
The two funds are the Rs160 crore Residential Opportunities Fund-I (ROF-I) and the Rs300 crore Residential Opportunities Fund-2 (ROF-II), the people said on the condition of anonymity. Puri, they said, is also planning to raise $300 million from offshore investors to invest in property.
ROF-I, registered with the Securities and Exchange Board of India in 2012 as a Category II Alternative Investment Fund, has raised money from institutions and high net worth investors in India keen on investing in residential assets. ROF-I has signed investment deals with Bengaluru-based Assetz Property, and Chennai-based developers Vishwakarma Real Estates & Constructions and Plaza Group.
Puri confirmed the fund-raising plan, but declined to comment on whether he will be buying the JLL funds. “We will start our roadshow by the end of this year. Our strategy is to buy completed residential projects at a discount and to sell through our newly acquired platform later,” Puri said.
The funds will deployed in mid-market residential projects with homes costing between Rs60 lakh and Rs1.25 crore in markets like Bengaluru, Pune, Hyderabad and Mumbai, Puri said. A JLL spokesperson also declined to comment.
The deal is expected to be closed in two months, the first of the two people said. According to the second person, Sandip Kundu, managing director of Segregated Funds Group that runs JLL’s PE funds, will join as chief executive officer at Puri’s ANAROCK Investment Advisors Ltd.
The management fee of ROF-I will be shared with JLL, while ANAROCK will get management fee and a part of the return from the Rs300 crore second fund, which is yet to start its deployment.
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This is Puri’s second deal with JLL after leaving the firm on 28 February. In April, ANAROCK bought JLL’s residential services business called Jones Lang LaSalle Residential Pvt. Ltd for an undisclosed sum. Puri also bought 13,000 sq.ft at One BKC building in Mumbai’s Bandra Kurla Complex (BKC) for around Rs40 crore, where he set up his new firm.
After buying JLL’s residential brokerage, Puri hired 240 more brokers, taking the total number to 650.
JLL’s India revenue is estimated to be around Rs3,000 crore. JLL India sold the business to focus more on its other businesses including office, retail, industrial, hotels, logistics and land.
“Unlike other real estate portals, the fulfilment of those leads and demands will be done by our own brokers. We would not be selling the lead to third party brokers. So, customer experience and delivery of service is completely under our control. It is a model which combines digital technology to bring in the demand and lead generation and the offline channel to fulfil those demands and leads,” Puri had told Mint in April.
Managers buying out their owners is not common in India, despite some isolated instances.
In 2014, Reliance Equity Advisors, the private equity (PE) arm floated by Anil Ambani’s Reliance ADAG, was acquired by Reliance Equity Advisors’ chief executive officer Ramesh Venkat, through a first-of-its-kind management buyout in Indian PE space. The fund was renamed Fairwinds Private Equity.