UTI Real Estate Opportunities Fund I

3 Tier Underwriting Process

• History based underwriting. Invest in projects with established credentials and track record
• Asset backed funding with cover exceeding investment amount. Usually seek to mortgage personal properties of Promoters for enhanced risk mitigation
• Additional collateral like Share Pledge, Personal/Corporate Guarantees, Post Dated Cheques & Escrow mechanisms

ROF’s Internal Due Diligence Is Also Aided By External Vendors

• Financial Diligence undertaken by Grant Thornton, BDO
• Legal Diligence undertaken by Luthra & Luthra, IC Universal Legal, Kochhar & Co.
• Property Valuation undertaken by CBRE, Cushman & Wakefield and Technical diligence undertaken by other partners.

3 Tier Underwriting Process

• History based underwriting. Invest in projects with established credentials and track record
• Asset backed funding with cover exceeding investment amount. Usually seek to mortgage personal properties of Promoters for enhanced risk mitigation
• Additional collateral like Share Pledge, Personal/Corporate Guarantees, Post Dated Cheques & Escrow mechanisms

ROF’s Internal Due Diligence Is Also Aided By External Vendors

• Financial Diligence undertaken by Grant Thornton, BDO
• Legal Diligence undertaken by Luthra & Luthra, IC Universal Legal, Kochhar & Co.
• Property Valuation undertaken by CBRE, Cushman & Wakefield and Technical diligence undertaken by other partners.

Generating superior risk adjusted returns by investing in late stage real estate projects. The real estate sector1 has been credit starved since the last 3–4 years due to shortage of financing options which has created this investment opportunity for medium-term lending to late stage projects with proven track record of sales. Potential returns are incrementally higher than the proportionate increase in risk of such structured lending. Risks can be further reduced by implementing special covenants, escrowing of specific cash flows and special collaterals requirements.

Approvals

• Will seek to invest in projects where construction is advanced. i.e., critical approvals are already in place
• In case of Plotted developments, will seek to invest after layout plan has been sanctioned by the relevant authority

Execution / Construction

• Will target to invest in late-stage projects, where either,
  • Civil structure is substantially ready, or
  • 40 – 50% of estimated project cost has been incurred, or iii) Plotted development projects

Sales

Will invest in projects where sales velocity and pricing for the project is established or validated by International Property Consultants.

Misrepresentation & Fraud

• UTI Alternatives has an elaborate due diligence process, where external advisors are retained and also internal teams are deployed to review the books of accounts, MIS statements, title verification and security creation
• The robustness of UTI Alternatives’ due diligence is also evident in the SDOF series managed by UTI Alternatives.

Investment Screening

250+ – Deal Sourcing:

Direct or via intermediaries. Any team member can be a deal originator. If preliminary review is positive, the originator will involve another member of investment team for further analysis. In SDOF I, 8 out of 11 investments were direct / proprietary origination.

100+ – Deal Sourcing:

Upon review of the analysis/recommendation by analysis team, further analysis, and meetings with potential borrower, the CEO rejects the deal or approves the issuance of Head of Terms (HoT).

26 – Deal Sourcing:

Post HoT acceptance, deal analysis team will prepare detailed investment appraisal note along with a detailed term sheet. CEO then either approves the term sheet or refers the proposal to investment committee members for feedback. Term sheet is subsequently signed upon CEO approval.

21 – Deal Sourcing:

DD process involves in house review and appointment of external agencies.

15 – Documentation:

Post commencement of DD, documentation is initiated with the legal counsel.

11 – Final Approval:

On receiving final DD reports, deal team prepares a final appraisal note for the IC, and on approval from the IC binding documentation is entered with the potential borrower.

Relationship Manager (RM)

Each portfolio company has a relationship manager (RM)mapped to it.

Monitoring

RM prepares quarterly review reports of the company including compliance with covenants, progress regarding projected cash flows, security creation and adequacy, rating defaults and any other areas of concerns. UTI Alternatives has subscribed to legal and media monitoring databases as an additional monitoring tool.

Management meetings

RM and the Partners meet with the company at least once every quarter. The RM is usually engaged with the Company at least once a week.

Approvals

Will seek to invest in projects where construction is advanced. i.e., critical approvals are already in place. In case of Plotted developments, will seek to invest after layout plan has been sanctioned by the relevant authority

Execution / Construction

Will target to invest in late-stage projects, where either, i) Civil structure is substantially ready, or ii) 40 – 50% of estimated project cost has been incurred, or iii) Plotted development projects

Sales

Will invest in projects where sales velocity and pricing for the project is established or validated by IPC

Misrepresentation & Fraud

UTI Alternatives has an elaborate due diligence process, where external advisors are retained and also internal teams are deployed to review the books of accounts, MIS statements, title verification and security creation. The robustness of UTI Alternatives’ due diligence is also evident in the SDOF series managed by UTI Alternatives.

Anchor Investor commitment

Anchor investors have committed INR 1,000 mm to the fund and have representation on the Investment Committee.

Robust Investment Process

Derived from 6 years of fund management through various AIFs.

Experience & Track Record

The Fund Manager currently manages 4 different funds ranging across structured credit and multi assets with investments in 19 companies and a history of delivering post expenses, pre-tax IRR in mid double digits for the investors.

The fund primarily seeks private credit opportunities in late-stage residential projects across the country which are expected to form the majority of the fund portfolio. Opportunistically, the fund will seek credit or equity opportunities in other real estate linked segments such as commercial real estate or real estate services.