Aditya Birla Sun Life AMC, part of Aditya Birla Capital, intends to raise over ₹1,500 crore, including a greenshoe option, through a Category II alternative investment fund focused on senior secured lending for real estate projects in major Indian cities.
The fund, named Aditya Birla Real Estate Credit Opportunities Fund-Series II (ABRECOF-II), will primarily invest in post-approval, brownfield projects developed by established real estate firms in tier-1 markets like Mumbai, Delhi-NCR, Bengaluru, Pune, Hyderabad, and Chennai.
The investment strategy will mirror that of its predecessor, Aditya Birla Real Estate Credit Opportunities Fund (ABRECOF), which has invested over ₹1,427 crore to date and achieved a portfolio-weighted average internal rate of return (IRR) of 17.65% with an exit multiple of 1.3x.
“ABRECOF-II is designed to provide predictable, risk-adjusted returns with robust downside protection by maintaining a conservative loan-to-value (LTV) ratio of less than 55%. The first fund achieved an average LTV of 42%, reflecting a careful approach to leverage and asset selection,” stated A Balasubramanian, MD & CEO of Aditya Birla Sun Life AMC Ltd.
Aditya Birla Sun Life AMC operates as a joint venture between Aditya Birla Capital and Sun Life (India) AMC Investments, falling under the broader Aditya Birla Capital framework, which encompasses financial services in lending, insurance, and asset management.
The fund has a base corpus of ₹750 crore, with an equal greenshoe option, totaling ₹1,500 crore. It has a five-year tenure, with the possibility of two one-year extensions.
“Focusing on senior secured transactions is likely to ensure capital protection and consistent returns,” he added regarding the fund’s strategy. “With disciplined underwriting and partnerships with top-tier developers, this platform aims for stable performance through various market cycles.”
At the investment level, ABRECOF-II aims for a gross IRR between 16% and 18%, with investment durations generally between 36 to 48 months.
The fund will function as a fixed-income product offering quarterly coupon payouts, designed for investors seeking stable income from senior secured real estate exposures.
Industry experts note that the fund’s strategy shows a growing interest among institutional and high-net-worth investors in credit opportunities backed by real estate, especially as developers seek alternatives to traditional banking amidst ongoing housing demand.
The real estate credit sector is witnessing increasing investor interest, fueled by strong housing sales, improved project fundamentals, and reduced developer leverage levels.
