Aditya Birla Sun Life AMC Plans ₹1,500 Crore Real Estate Credit Fund Launch

Aditya Birla Sun Life AMC has announced plans to raise over ₹1,500 crore through its second real estate-focused Category II Alternative Investment Fund (AIF), according to recent reports from Mumbai. The fund is designed to target senior secured lending opportunities across India's premier top real estate hotspots in India.

Fund Structure and Target Corpus

The asset management company revealed that the Aditya Birla Real Estate Credit Opportunities Fund – Series II (ABRECOF-II) aims to mobilize over ₹1,500 crore, which includes a greenshoe option. The fund will concentrate on senior secured debt in post-approval, brownfield residential and commercial real estate projects across Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, and Chennai.

Investment Focus and Borrower Criteria

According to the fund's strategy, ABRECOF-II will extend financing to established developers with proven track records. The focus remains on projects that have already received necessary approvals, representing lower-risk investment opportunities in Pune's real estate market and other key cities.

Proven Track Record of Series I Fund

The company highlighted that the fund will replicate the successful strategy of its predecessor, ABRECOF, which deployed ₹1,427 crore across various real estate projects. The first series delivered a portfolio-weighted average Internal Rate of Return (IRR) of 17.65 percent, with an exit multiple of 1.3x. The fund maintained a conservative average Loan-to-Value (LTV) ratio of 42 percent, demonstrating prudent risk management principles.

Risk Management and Return Strategy

ABRECOF-II is structured to maintain a conservative LTV of under 55 percent, providing investors with downside protection and risk-adjusted returns. This approach aligns with current trends in Indian real estate investment strategies that prioritize capital preservation alongside growth.

Management Perspective

A. Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC, stated that the second fund has been structured to offer predictable returns with strong asset-level protection by maintaining prudent leverage levels. The management emphasized that the fund's conservative approach would appeal to institutional investors seeking stable returns in the commercial real estate sector.

Company Background

Aditya Birla Sun Life AMC operates as a joint venture between Aditya Birla Capital and Sun Life (India) AMC Investments Inc. The asset management company functions within the broader Aditya Birla Capital ecosystem, which encompasses the group's diversified financial services businesses spanning insurance, lending, and investment management.

Disclaimer: This news article is based on information available from publicly accessible sources. Readers are advised to conduct their own due diligence and consult with financial advisors before making any investment decisions. The content is for informational purposes only and should not be construed as investment advice or recommendation.