In a new trend in the real estate financing sector, many a senior executive at both domestic and global firms is quitting their job to start own ventures. Sectoral experts say a major trigger for executives veering towards entrepreneurship is the high demand for alternative investment fund money to buy land, in the backdrop of increased restrictions on non-banking financial companies.
In recent months, about half a dozen such executives have quit their job to launch their own funds, with Nipun Sahni, partner at the US-based investment major Apollo Global Management, being the latest.
Sahni is likely to set up a fund to invest in real estate. “Apollo has agreed to anchor a real estate credit fund should Sahni decide to launch it,” a source said.
“Apollo has been the best chapter of my 30-year career…. I look forward to starting the next phase as an entrepreneur,” Sahni said, adding he is now advising Apollo on its entire real estate portfolio and investments in the country.
Sahni has invested and managed more than Rs 20,000 crore in his long career. He headed Apollo since 2015. Prior to Apollo, he was leading Merrill Lynch real estate fund in the country. He has completed more than 50 transactions, including deals with Ascendas, Piramal, DLF, Lodha, Runwal, Sattva Salarpuria, and Embassy.
Besides Sahni, Mumbai-based Ankur Gulati, managing director of real estate investments at Canada’s CPP Investments (CPPIB), resigned after a stint of about 10 years in the firm. He is looking to set up an alternative investment fund (AIF) in public equities. When contacted, Gulati declined to comment.
Among other real estate financing executives moving towards entrepreneurship are Ashish Singh, partner, head of India and South East Asia, real estate at the UK-based private equity firm Actis; Amar Merani, chief investment officer and head of real estate assets of 360 One Asset; Avinash Sule, chief executive, industrial and logistics and hospitality of development and investment firm RMZ; and Chanakya Chakravarti, head of indirect investments, Asia-Pacific, Ivanhoe Cambridge, the real estate arm of CDPQ.
Singh could take up an entrepreneurial role after his transition from Actis, people in the know said, adding he would stay with the firm till the end of next year.
Merani, who is now serving his notice period at 360 One Asset, is believed to be looking at floating a fund or starting a proptech company or both, sources said. Merani, who had previously worked with Xander Finance, could not be contacted for comments.
Sharad Mittal, the CEO of real estate funds at Motilal Oswal Alternates, resigned last year to set up his own fund management firm.
Shobhit Agarwal, managing director of Anarock Capital, said senior executives at finance companies were busy with refinancing in the last decade and then got involved with stressed assets. “Now not much work is left. They were used to high activity which has slowed now. That’s why they are looking at own funds,” Agarwal said.
Also, the action has shifted from private side to public as many companies are getting listed, he said. Another senior executive who quit his job recently said that after the IL&FS crisis in 2018, NBFC activity has slowed in the real estate sector and the demand for AIF money went up as these entities are less regulated.
“NBFCs are restricted from lending for buying land while AIFs do not have such restriction. That’s why people are looking at floating own funds,” he said, adding during 2015-16 many senior executives in real estate had quit and joined NBFCs as the latter saw a lot of demand for funds.