Apollo Global Buys Morgan's $300-Mn Real Estate Portfolio
In a major fund-transfer transaction, global alternative asset manager Apollo Global Management has bought international financial services giant JP Morgan’s real estate fund management platform in India. The deal valuation has been pegged at $300-million, and includes 15 investments across five cities. JP Morgan has assets in residential and hospitality segment and has raised two funds, India Property Fund and India Property Fund II since 2006.
Apollo Global will be using the platform to grow its presence in Indian real estate and expand its assets under management. Through this deal, Apollo will now have access to new developer partners.
Apollo Global in India
With intent of expanding its footprint, Apollo had taken over real estate investment division of Citigroup Inc in November 2010. It had also invested Rs 400 crore in Noida-based Logix Group, but exited the project recently with 27 per cent return, one of the highest return exits in Indian real estate. The total investment portfolio of Apollo Global is around Rs 1200 crore across projects in Mumbai and the Delhi-National Capital Region.
The transformation of fund managers
Structural reforms in Indian real estate sector are causing rise in investment inflow from foreign and domestic institutional investors.
In the recent past, many global investors have invested aggressively in real estate assets and companies. This includes GIC, Blackstone Group, Brookfield Asset Managment, Goldman Sachs, etc.
Over the years, the private equity investments in the sector have also risen. According to News Corp’s VCCEdge, private equity and debt investments in real estate grew to $4.18 billion across 79 transactions in 2017, compared to $3.73 billion across 138 deals in 2016.
Last year’s single-largest transaction saw promoters of India’s biggest developer DLF selling 33.34 per cent in its rental arm for around Rs 8,900 crore to GIC, Singapore’s sovereign wealth fund.
According to an estimate made by an international property consultant, private equity investment in Indian real estate will touch $100 billion by 2026.