Apollo Global Management, one of the largest alternative asset managers, has acquired global financial services major JP Morgan’s real estate fund management platform in India.
The platform comprises two funds of vintage 2007 and 2014 with aggregate assets under management of about $300 million.
These funds have 14 investments across six cities and 10 joint venture partners including Hiranandani Group, Assetz Property, Kolte-Patil Developers, Sheth Developers, Aparna Group, Kanakia Group and Vaswani Builders. It also owns the recently-opened Renaissance Marriott hotel in Bengaluru.
Spokespersons of both Apollo Global and JP Morgan declined to comment on the story. Following the transfer, a few of JP Morgan’s members handling real estate fund management platform in India would be integrated into Apollo Global’s on-ground team. The newly created joint platform will be led by Nipun Sahni, who currently heads Apollo Global’s India real estate business.
The deal is the largest transfer of a fund manager in the Indian real estate industry.
According to a person involved directly in the transaction, the deal has fructified given the pedigree of Apollo Global that has assets under management worth $269 billion and ranks among the world’s largest alternate asset managerApollo has past experience of managing the $1.4-billion Citi property portfolio in Asia, including India, and has exited over $1.2 billion of its portfolio.
Apollo had earlier this year exited its 300-crore investment in Logix Group Noida at around 27% return making it one of the superior return exits in Indian real estate so far this year.
Several funds of old vintage have seen great stress in their portfolios with limited distribution to their investors, which has frustrated international investors and restricted the ability of new managers to raise funds.
The fund management industry has witnessed few more such transfers recently. Actis, a global growth markets investor, announced in August that it has completed the acquisition of Standard Chartered Bank’s Principal Finance Real Estate business in Asia.
This portfolio is seeded with seven investments in China, India, and South Korea and Actis plans to continue investing in Greater China, South Korea, Southeast Asia, and India.
Given the ongoing transformation in business environment led by structural reforms, Indian real estate is witnessing a robust rise in investment inflow as both foreign and domestic institutional investors are pumping in more funds into the sector.
Several large global institutional investors, including GIC, Blackstone Group, Brookfield Asset Management, Canada Pension Plan Investment Board (CPPIB), Goldman Sachs and Qatar Investment Authority, have been investing aggressively in Indian real estate assets over the past few years.