Trend of Real Estate Executives Venturing into Entrepreneurship
An increasing number of senior real estate financing executives are leaving their positions to start their own ventures. The trend is driven by the high demand for alternative investment funds in the real estate sector, particularly for land purchases, am
Real EstateEntrepreneurshipInvestment FundsNbfcAifReal Estate NewsOct 07, 2024
In recent months, several such executives have resigned to launch their own funds. One of the most recent is Nipun Sahni, a partner at the U.S.-based investment giant Apollo Global Management. Sahni is expected to establish a fund focused on real estate investments. According to a reliable source, 'Apollo has agreed to anchor a real estate credit fund should Sahni decide to launch it.'
Reflecting on his decision, Sahni stated, 'Apollo has been the best chapter of my 30-year career…. I look forward to starting the next phase as an entrepreneur.' He will continue to advise Apollo on its real estate portfolio and investments in India. Sahni has managed and invested over Rs 20,000 crore throughout his career, having led Apollo since 2015. Prior to Apollo, he was at the helm of Merrill Lynch's real estate fund in India, executing over 50 transactions, including significant deals with Ascendas, Piramal, DLF, Lodha, Runwal, Sattva Salarpuria, and Embassy.
Another notable figure in this trend is Ankur Gulati, the managing director of real estate investments at Canada’s CPP Investments (CPPIB). Gulati, who has been with the firm for about a decade, is now set to establish an AIF in public equities, though he declined to comment when approached.
Various other real estate financing executives are also moving towards entrepreneurship. Ashish Singh, the partner and head of India and South East Asia real estate at the UK-based private equity firm Actis, is considering an entrepreneurial role after his transition from Actis. Singh is expected to stay with the firm until the end of next year.
Amar Merani, the chief investment officer and head of real estate assets at 360 One Asset, is currently serving his notice period and is reportedly looking to launch a fund or start a proptech company, or both. Merani, who previously worked with Xander Finance, was unavailable for comments.
Avinash Sule, the chief executive of industrial and logistics and hospitality at RMZ, a development and investment firm, and Chanakya Chakravarti, the head of indirect investments for Asia-Pacific at Ivanhoe Cambridge, the real estate arm of CDPQ, are also part of this growing trend.
Sharad Mittal, the CEO of real estate funds at Motilal Oswal Alternates, resigned last year to establish his own fund management firm.
Shobhit Agarwal, managing director of Anarock Capital, offered 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, not much work is left. They were used to high activity, which has slowed down, leading them to look at starting their own funds,' Agarwal explained.
Additionally, the focus is shifting from the private to the public sector as many companies are getting listed. Another senior executive who recently resigned noted that after the IL&FS crisis in 2018, NBFC activity has significantly slowed in the real estate sector, while the demand for AIF money increased due to fewer regulatory constraints. 'NBFCs are restricted from lending for buying land, whereas AIFs do not have such restrictions. That’s why people are looking at floating their own funds,' he added. This trend mirrors the period between 2015-16 when many senior real estate executives left to join NBFCs, driven by the high demand for funds.
Frequently Asked Questions
Why are real estate executives leaving their jobs to start their own ventures?
The primary reasons include high demand for alternative investment funds (AIFs) for land purchases, reduced activity in their current roles, and fewer regulatory restrictions compared to non-banking financial companies (NBFCs).
Who is Nipun Sahni and what is he planning to do?
Nipun Sahni, a partner at Apollo Global Management, is leaving to set up a real estate investment fund. Apollo has agreed to anchor a real estate credit fund if Sahni decides to launch it.
What role do regulatory changes play in this trend?
Increased restrictions on NBFCs, particularly in lending for land purchases, have made AIFs more attractive. AIFs are less regulated, making them a preferred choice for real estate investments.
Who are some other notable executives moving towards entrepreneurship?
Notable figures include 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 is the impact of the IL&FS crisis on the real estate sector?
The IL&FS crisis in 2018 led to a slowdown in NBFC activity in the real estate sector, increasing the demand for AIF money. This shift has driven many senior executives to start their own funds.
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