Real Estate Veterans Trade Corporate Jobs for Entrepreneurial Ventures

A growing trend in the real estate financing sector sees senior executives from both domestic and global firms stepping down to establish their own ventures. The high demand for alternative investment funds and relaxed regulations are key drivers of this

Real EstateEntrepreneurshipAlternative Investment FundsNbfcsReal Estate FinancingReal EstateOct 07, 2024

Real Estate Veterans Trade Corporate Jobs for Entrepreneurial Ventures

Real Estate:In a notable shift within the real estate financing sector, many seasoned executives are leaving their corporate roles to start their own ventures. This trend is driven by the high demand for alternative investment fund (AIF) money, especially for land acquisitions, as non-banking financial companies (NBFCs) face increased restrictions.\n\nIn the past few months, several high-profile departures have taken place, with Nipun Sahni, a partner at the US-based investment firm Apollo Global Management, being one of the latest. Sahni is set to launch a fund focused on real estate investments. “Apollo has agreed to anchor a real estate credit fund should Sahni decide to launch it,” a reliable source revealed.\n\nSahni, who has managed over Rs 20,000 crore in real estate investments during his career, expressed his excitement about the new venture. “Apollo has been the best chapter of my 30-year career. I look forward to starting the next phase as an entrepreneur,” he stated. Sahni has been instrumental in more than 50 transactions, including significant deals with Ascendas, Piramal, DLF, Lodha, Runwal, Sattva Salarpuria, and Embassy.\n\nAnother notable departure is that of Mumbai-based Ankur Gulati, who recently resigned from his position as managing director of real estate investments at Canada’s CPP Investments (CPPIB). Gulati, who has spent about a decade with the firm, is reportedly planning to set up an AIF focused on public equities. When contacted, Gulati declined to comment on his future plans.\n\nOther real estate financing professionals joining the entrepreneurial bandwagon include Ashish Singh, partner and head of real estate for India and South East Asia 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 RMZ; and Chanakya Chakravarti, head of indirect investments for Asia-Pacific at Ivanhoe Cambridge, the real estate arm of CDPQ.\n\nSingh is expected to take on an entrepreneurial role after his transition from Actis, according to sources. Merani, currently serving his notice period at 360 One Asset, is believed to be considering starting a fund or a proptech company, or both. Merani, who has previous experience with Xander Finance, could not be reached for comments.\n\nSharad Mittal, the CEO of real estate funds at Motilal Oswal Alternates, resigned last year to set up his own fund management firm. This move reflects a broader trend among real estate financiers, who are finding the current environment conducive to entrepreneurship.\n\nShobhit Agarwal, managing director of Anarock Capital, provided insights into this trend. “Senior executives at finance companies were busy with refinancing in the last decade and then got involved with stressed assets. Now, with not much work left, they are looking to start their own funds,” he explained.\n\nAgarwal also noted that the action has shifted from the private sector to the public sector, with many companies getting listed. Another senior executive who recently left his job highlighted the impact of the IL&FS crisis in 2018, which led to a slowdown in NBFC activity in the real estate sector. “NBFCs are restricted from lending for buying land, while AIFs do not have such restrictions. That’s why people are looking at floating their own funds,” he added.\n\nThis trend is not new. During 2015-16, many senior real estate executives left their jobs to join NBFCs, which saw a surge in demand for funds. However, the current wave of entrepreneurship is being driven by regulatory changes and the evolving dynamics of the real estate market.

Frequently Asked Questions

What is driving the trend of real estate executives starting their own ventures?

The trend is driven by the high demand for alternative investment fund (AIF) money, especially for land acquisitions, and the increased restrictions on non-banking financial companies (NBFCs).

Who are some of the notable real estate executives who have recently quit to start their own funds?

Notable executives include Nipun Sahni from Apollo Global Management, Ankur Gulati from CPP Investments, Ashish Singh from Actis, Amar Merani from 360 One Asset, and Sharad Mittal from Motilal Oswal Alternates.

What are the advantages of AIFs over NBFCs in the real estate sector?

AIFs are less regulated and do not have the same restrictions as NBFCs, such as the restriction on lending for buying land, making them more attractive for real estate investments.

How has the real estate market changed in recent years to encourage this trend?

The market has seen a shift from private to public, with many companies getting listed. Additionally, the IL&FS crisis in 2018 led to a slowdown in NBFC activity, increasing the demand for AIFs.

What are the potential risks for real estate executives starting their own funds?

The risks include market volatility, regulatory changes, and the challenges of establishing a new business in a competitive and regulated industry.

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