ASK Real Estate Special Opportunity Fund – IV

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About The AMC

ASK Investment Managers Limited (ASKIM), a prominent asset and wealth management company, primarily caters to India’s HNI and UHNI sectors. The business was among the first to get a licence for portfolio management services in India and is currently one of the largest suppliers of discretionary equity portfolio management services.

ASK was the first portfolio management firm to set up operations in GIFT city for international investors. It just developed India’s first AIF with digital client onboarding, a paperless and straightforward method. ASK invests exclusively in listed Indian equities for its clients, both headquartered abroad and in India, using segregated accounts and commingled funds.

Fund Snapshot

Investment type Preferred Returns
Fund Type Category II AIF
Commitment period 12 (+6)
Management Fee On capital called during the commitment period
Segment focus Residential, Mixed-Use and Commercial
Investment Pipeline 50% of investments pre-identified
Stage of Investment Post approval
Fund Size INR 1,000 Cr (Greenshoe option: INR 1,500 Cr)
Target Return 21% Gross Investment XIRR^
Tenure 5.5 (+1+1) Years from final close
Commitment Period 12 months from Final close + extendable by 6 months at the discretion of the Investment Manager
Hurdle Rate 10% XIRR
Sponsor Contribution 2.5% of the funds raised + USD 1.5 Mn (~INR 11 Cr)
Team Contribution 1.0% of the funds raised

Prudent Developer Selection

  • Min 20 years of experience
  • 5 Mn + sqft. delivered
  • Execution capability
  • Strong regional developers
  • Strong sales franchise
  • Superior land aggregation capability
  • Sound financial track record
  • Stakeholder satisfaction score
  • Corporate Governance
  • Accessibility – Management style

Risk Management Approach

  • Capital structure
  • Raising additional finance
  • Charge on firm’s assets
  • Business plan
  • Appointment of project personnel, consultants, contractors, vendors etc.
  • Marketing and Sales plan
  • Change in cost structure
  • Mortgage of land / Saleable area
  • Personal Guarantee / Corporate Guarantee
  • ~ 2 X security cover
  • Change in specifications

Monitoring Mechanism

Conduct Monitoring Committee Meetings every 2 Months

Monitoring Committee comprises the following members:

  • Company Promoter
  • CEO/COO
  • Head of Finance
  • Head of Sales
  • Head of Construction
  • Head of Collections
  • Head of Liaison

Participants from the ASK Group

  • ASK PIA, CEO
  • ASK PIA, CIO / Managing Partner (South)
  • ASK PIA, VP/Sr. VP Asset Management
  • ASK PIA, Investment Manager

Participants from External agencies

  • Appointment of PMC (Project Management Consultant) and QS (Quantity Surveyor) by ASK for monitoring of Time, Cost and Quality

Investment Strategy

  • Investments in Top six cities (Mumbai – MMR, NCR, Bengaluru, Chennai, Pune & Hyderabad)
  • Focus on job/ growth corridors
  • Investments in affordable & mid-segment residential, commercial and mixed-use developments
  • Sustainable developments goals
  • Investments in preferred returns
  • Control investments with a defined risk management framework
  • Conservative underwriting approach with a margin of safety
  • Investments at distress valuations
  • Partnering with established strong regional developers
  • Opportunistic allocation of asset segment and capital structure
  • Invest in projects being Socio-Economic Value Accretive (SEVA)

Fund Manager Profile

Amit Bhagat – CEO and Managing Director, ASK Property Investment Advisors

Amit Bhagat

  • Amit joined ASK in 2008 and co-founded the property fund business. He was appointed as MD & CEO of ASK PIA in 2009
  • Manages and Advises ~USD 900 Mn (INR 5600 Mn) of Real Estate Investments
  • Previously, he was the National Credit Head for the mortgage division of ICICI Bank and also headed ICICI Property Services
  • Amit is a Chartered Accountant and has 27 years of experience in mortgage finance and financial services
  • He is known for his skills in identifying new growth frontiers, strategic agility and negotiation, leading to win-win partnerships.

Core Investment Philosophy

  • Prudent developer selection
  • Top Six Cities (MMR; NCR; Bengaluru; Pune; Chennai & Hyderabad)
  • Growth corridor drove by job creation in micro-markets
  • Development stage & distressed opportunities
  • Conservative underwriting – Margin of safety
  • Controlled investments
  • Asset management focus and monitoring
  • Deep understanding of partner’s core values and operations
  • Compounding opportunity

Investment Opportunity

Acquisition at Distress valuation 

  • Value acquisition from distressed sellers
  • Haircut to existing investors/ lenders
  • Weaker players surrender project/s to stronger ones

Mismatch of Cashflows

  • Replace existing lender
  • Fully approved projects
  • Mid/Last mile funding

Working Capital Funding

  • Low-cost debt from banks/HFCs
  • Lease Rental Discounting (LRD)

Covid-19: Crisis and Opportunity

Commercial Real Estate

  • Commercial rentals have been under negotiation for part/full wavier during the lockdown and renegotiations thereafter
  • Dedensification of offices due to social distancing can accommodate <50% of capacity
  • Ongoing deliberations regarding the future of working from home 

Residential Real Estate

  • A significant slowdown in sales, collections and construction
  • Pre-covid levels reached in 2021
  • Refinancing continues to be a challenge

Countercyclical opportunity

  • End user demand for affordable and mid-segment housing still intact
  • Government impetus through stamp duty reduction and low-interest rates
  • Further consolidation will be a boost for well-capitalized brands
  • Increased deal flow for preferred return opportunities with conservative underwriting and margin of safety

Product - AMC Category AUM (in Cr.) Performance 1M 3M 6M 1Y 2Y 3Y 5Y 10Y SI

ASK India Select Portfolio

AMC Name: ASK Investment Managers Ltd Inc Date: 4-Jan-10
Multi Cap
(PMS)
2,808 Strategy 5.80 10.60 15.30 22.70 6.50 12.90 13.50 17.30 15.70
S&P BSE 500 8.00 12.40 18.50 26.50 15.20 20.40 17.60 16.10 12.80

ASK Indian Entrepreneur Portfolio

AMC Name: ASK Investment Managers Ltd Inc Date: 25-Jan-10
Multi Cap
(PMS)
18,959 Strategy 3.70 7.20 10.00 20.50 5.00 13.80 14.80 18.40 17.60
BSE 500-TRI 8.00 12.40 18.50 26.50 15.20 20.40 17.60 16.10 13.10

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.