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Time of India

White Knights to focused bets, AlFs build their realty presence

Alternative Investment Funds are increasingly vital for India's real estate sector, providing crucial capital for land acquisition and project completion. These funds address funding gaps, accelerate project launches, and ensure timely delivery, attracting strong investor interest. With a significant rise in active AIFs and commitments, they're becoming a key source of funding, especially for stalled projects needing revival. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Alternative Investment Funds (AIFs) are supporting property developers in shoring up capital for land acquisitions and project completions, emerging as a key backbone of India's thriving real estate many as four AIFs focused on this sector were launched last year. At 14%, the real estate sector accounted for the largest share of cumulative net AIF investments in 2024.'AIFs today are doing more than filling funding gaps—they're strategically deploying capital at key stages like land acquisition and approvals, fast-tracking launches, and ensuring timely delivery,' said Amit Goyal, managing director, India Sotheby's International Realty.'We see this shift reflected in the strong investor interest and closing of the first round of Rs 500 crore, in the ASK Curated Luxury Asset Fund where India Sotheby's International Realty is the co-sponsor," said Goyal. It is the only AIF dedicated to luxury real estate. The fund plans to raise Rs 1,000 crore with a greenshoe option of Rs 500 or privately pooled funds that invest in non-traditional assets like private equity, hedge funds, and real estate offer niche, high-risk, high-reward opportunities for experienced investors.'We have recently launched SGRE Fund and our aim is to invest in those projects which are stuck due to lack of funds,' said Suresh Garg, promoter, SGRE Fund and chairman & managing director at Nirala World. 'The portfolio has scope to fund projects which are struggling to get funds from banks, financial institutions and from other sources. We are also ready to fund promoters who require infusion of initial funding for the eligibility of SWAMIH Fund.'The fund has so far provided funds to two residential projects. One comprised premium plotted developments while the other was seeking initial capital to meet eligibility of SWAMIH fund for a decade-old, stalled project under recommendation of the Amitabh Kant Committee and co-developer policy of GNIDA.'Shortage of funds and lack of effective management are the main cause of stalled projects in the region. At this stage, the projects are either eligible for revival or promoters are filing for bankruptcy,' said Dinesh Gupta, president, CREDAI Western UP. 'Currently, we have positive market trends and apart from SWAMIH funds, the sector needs more sources of alternative funds to push viable and workable projects.'According to Anarock research, the number of active AIFs has grown 36-fold over the past decade—to 1,524 as of March 5 2025 from 42 as of March 31 2013 with commitments raised increasing fivefold since FY13 and FY25, commitments raised in AIFs surged 83% compounded annually, reflecting their growing importance in the broader investment landscape.