The pension fund of BAE Systems is the cornerstone investor in a new Indian residential lending platform.
Investcorp has secured investment from BAE Systems Pension Funds Investment Management and has raised US$130m (€117m) in anchor commitments.
The Bahrain-headquartered investment manager will provide “last-mile funding” for affordable and mid-market housing assets in the top seven cities in the country.
Vikram Aggarwal, head of private markets at BAE Systems Pensions, said: “We believe that the Indian affordable-housing segment represents a sizeable and attractive market opportunity, catalysed by urbanisation and structural reforms.
”BAE Systems is pleased to make a positive contribution to the development of affordable housing in India, where there is significant demand but a lack of institutional-quality capital to fund projects.”
Sanjay Kohli, principal at Investcorp London, said: “Global investors are looking at the Indian real estate sector with a great deal of enthusiasm following the recent policy reforms, including Real Estate Regulatory Act, 100% FDI in construction and easing of REITs regulations.
“The reforms are helping property markets in India get more transparent, prompting institutional investors to increase their exposure in the country.”
Investcorp, which manages over US$28bn of assets globally, including in the US and Europe, has deployed more than US$200m of capital in 27 affordable and mid-market residential projects.
Ritesh Vohra, partner and head of real estate at Investcorp India, said: “The current slowdown in the residential markets, as well as in the flow of credit in India, create an opportune timing for us to launch this new lending initiative, which builds upon our track record of similar credit investments in India.
“Affordable housing has emerged as a dominant segment, augmented by government efforts and the introduction of favourable policy reforms.”
A previous version of this story referred to the lending platform as fund. It is, in fact, a non-banking financial corporation.
