Real Estate Financing Executives Embrace Entrepreneurship
In a notable trend, several senior executives from both domestic and global real estate financing firms are quitting their jobs to launch their own ventures, driven by the high demand for alternative investment funds.
Real EstateEntrepreneurshipAlternative Investment FundNbfcSenior ExecutivesReal Estate MumbaiOct 07, 2024
In recent months, about half a dozen such executives have made the move, with Nipun Sahni, a partner at the US-based investment giant Apollo Global Management, being the latest to join this trend. Sahni is planning to set up a fund dedicated to real estate investments. “Apollo has agreed to anchor a real estate credit fund should Sahni decide to launch it,” a source revealed. Sahni expressed his gratitude for his 30-year career at Apollo and his excitement about the next phase as an entrepreneur. He will continue to advise Apollo on its real estate portfolio and investments in India.
Sahni has managed over Rs 20,000 crore in his career, leading Apollo since 2015. Prior to Apollo, he was the head of the Merrill Lynch real estate fund in India and has completed over 50 transactions, including deals with major players like Ascendas, Piramal, DLF, Lodha, Runwal, Sattva Salarpuria, and Embassy.
Mumbai-based Ankur Gulati, managing director of real estate investments at Canada’s CPP Investments (CPPIB), also resigned after a decade-long stint. Gulati is looking to set up an AIF focused on public equities. Despite being contacted, Gulati declined to comment on his future plans.
Other notable executives making the transition include Ashish Singh, partner and 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 at 360 One Asset; Avinash Sule, chief executive of industrial and logistics and hospitality at development and investment firm RMZ; and Chanakya Chakravarti, head of indirect investments, Asia-Pacific, at Ivanhoe Cambridge, the real estate arm of CDPQ.
Singh is expected to take on an entrepreneurial role after transitioning from Actis, with plans to stay with the firm until the end of next year. Merani, who is currently serving his notice period at 360 One Asset, is believed to be considering starting a fund or a proptech company, or both. Attempts to contact Merani for comments were unsuccessful.
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, explained that senior executives at finance companies were previously occupied with refinancing and dealing with stressed assets. “Now that the pace has slowed down, they are looking to start their own funds,” Agarwal noted.
The shift from private to public sectors is also a significant factor, as many companies are getting listed. Another senior executive mentioned that after the IL&FS crisis in 2018, NBFC activity in the real estate sector has slowed, while the demand for AIF money has increased due to fewer regulatory restrictions. “NBFCs are restricted from lending for land purchases, whereas AIFs do not have such restrictions, which is why many are considering setting up their own funds,” the executive elaborated.
This trend highlights the dynamic nature of the real estate financing sector and the entrepreneurial spirit of these seasoned professionals, who are leveraging their extensive experience to venture into new opportunities.
Frequently Asked Questions
What is driving real estate financing executives to start their own ventures?
The high demand for alternative investment fund (AIF) money, particularly for land acquisition, and the increased restrictions on non-banking financial companies (NBFCs) are key factors driving this trend.
Who are some of the notable executives making this transition?
Notable executives include Nipun Sahni from Apollo Global Management, Ankur Gulati from CPP Investments, Ashish Singh from Actis, Amar Merani from 360 One Asset, Avinash Sule from RMZ, and Chanakya Chakravarti from Ivanhoe Cambridge.
What challenges do these executives face in starting their own funds?
Challenges include regulatory compliance, market competition, and the need to build a strong investor base and network.
How has the real estate financing sector changed in recent years?
The sector has seen a shift from private to public investments, with many companies getting listed and a slowdown in NBFC activity, particularly after the IL&FS crisis in 2018.
What advantages do AIFs have over NBFCs in the real estate sector?
AIFs are less regulated and do not have restrictions on lending for land purchases, making them more attractive for real estate investments.
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