Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Alpha was founded in 2003 by a management team, which includes Colonel R.S. Sodhi and Mr. S.K. Sayal and is backed by Mr. Ghanshyam Sheth and the Mulji and Choudhurie families. It develops projects in northern and western India and has been involved in developments in IndiaÆs business process outsourcing (BPO) hub of Gurgaon as well as in Amritsar, Jaipur and Ahmedabad.
The team at Alpha has been together for a decade and was earlier a part of GESCO (the demerged real estate division of Great Eastern Shipping). In a short period it has acquired 450 acres of land.
"Alpha represents an opportunity to partner with a best in class and deeply experienced management team with a unique and highly scalable business model in a region of the country where we continue to expect tremendous growth. We continue to believe India represents a compelling real estate investment opportunity and this investment is a continuation of our India strategy," says Zain Fancy, executive director and head of Morgan Stanley Real Estate in Asia-Pacific.
In March 2006, Morgan Stanley paid $68 million for an undisclosed minority stake in Mantri Developers, a privately-owned south-India based developer of retail, residential and commercial projects. Like in the case of Alpha, Morgan Stanley cited the quality of the management team as a key driver of its investment decision.
Geographically, Morgan Stanley is covering a number of IndiaÆs fastest growing cities through its investments with Mantri based in IndiaÆs information technology hub, Bangalore. Through the Alpha investment Morgan Stanley has now got a toehold in north and west India as well.
Real estate is the new flavour of the month in India. The countryÆs burgeoning middle class now has access to competitive home loans and this has fuelled the demand for residential properties in the countryÆs main employment centers.
Quality offices are perennially in short supply and the government has been liberalising foreign investment norms in the sector, allowing those who have been watching on the borderline to play a more active role.
Other international investors looking at this market includes SingaporeÆs CapitaLand, which recently took a stake in Pantaloon-promoted retail-led fund Horizon.
Regulators keep their eyes open on tightening insurance industry by introducing more detailed risk management requirements, which could bring pressure on smaller players.
China and India are more obvious choices for AustralianSuper to consider in Asia Pacific, but the super fund currently lacks the expertise and prefers to stick to the US and Europe.
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Investors are increasingly turning to private companies and private debt in their hunt for ESG alpha, but the age-old problem of transparency and due diligence remains