India’s first fully Sharia-compliant and Sebi registered fund launched its third investment fund, Realty AIF 1 (Alternative Investment Fund) on Monday. The fund is meant for the real estate sector with IL&FS Trust Company acting as trustee for the fund.
Promoted by Secura Investment Management (India), the fund’s investments and opera- tions are in compliance with the Islamic finance rule. Targeted to raise `200 crore with the Greenshoe Option of `100 crore more, the minimum in- vestment under the scheme, which will have its first closing on December 31, 2016, is `1 crore, Mehaboob MA, managing director, Secura Investment Management said. The tenure of the fund is seven years from the final closing.
“With the investment poten- tialinrealestatesectorgrowing at a steady pace, we are looking at an annualised RoI of 15-20%, withaprofitshareposthurdleof 80:20 with catch-up” , he added. Islamic teaching encourages trading, investment and chari- table giving, but frowns on the giving or receiving of interest, or riba, which it categorises as usury. Sharia stipulates against
earning fixed returns such as interest, warns against exces- sive speculation and shares the risk of the business.
“The first fund launched in 2009 was closed after it complet- ed its five-year tenure with an annualised return of 18%.The fund had invested in privately negotiated equity of commer- cial developers and realty com- panies in Kozhikode,” Mehaboob said. The second fund, Secura India Real Estate Domestic Scheme 2, is in the in- vestment stage and its tenure will be over in 2017.
“Potential investors of the fund include institutional in-vestors, high net worth individ- uals and any other investors,
who are qualified to invest. We had raised small-sized funds in our earlier outings. Now that the norms to tap into offshore investors have been relaxed, we are looking at a bigger capital pool,” Mehaboob said.
Company officials said the investments under the fund will be made in the modes of investment in equity, quasi- equity and equity-related instruments, investment in a co-investment capacity with development companies and other promoters of a portfolio company, investment in special purpose vehicles created by the company or other AIF and as partner with re- puted developers.