Morgan Stanley Real Estate Investing Managing Director Naresh Naik has resigned to set up a real estate fund house that will invest exclusively in India.
Naik, who worked with Lehman Brothers India before joining Morgan Stanley three years ago, is collaborating with Robert Naso, Managing Director and Head of Asset Management, Asia Pacific, Morgan Stanley Real Estate, for the venture.
Naik has confirmed his resignation over the telephone from Mumbai.
The new fund, to be headquartered in Singapore, will focus on residential and commercial office space ventures in large cities including Mumbai, Delhi and Bangalore.
Indian real estate companies are increasingly turning to private equity funds to raise money for construction or to pay for land as banks—their biggest source of capital—have tightened lending to the sector.
But these funds, too, are facing challenges in finding investors. About half a dozen funds that have been scouting abroad for about a year to raise between $200 million and $700 million (Rs.982 crore and Rs.3,437 crore) each are finding it difficult to do so.
This is the second big overseas fund-raising initiative for the sector. In 2006-07, domestic real estate funds got commitments for $8-10 billion, of which about $5 billion made its way to the Indian market.
Naik is raising two funds. The first is a $300 million overseas fund, for which he has secured commitments for about $100 million. This fund will invest only in projects compliant with India’s foreign direct investment norms.
The second is a domestic fund that has secured commitments for about $75 million. The size of the fund wasn’t disclosed.
