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About Fund Manager

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

  • 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.

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)

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

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

 

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