LICHFL Housing and Infrastructure Fund (LHIF)

Sponsored by LIC Housing Finance Ltd.

LHIF is a housing and infrastructure focused fund, with a target size of INR 10 billion, including a green shoe option of INR 2.5 billion. It is sponsored by LIC Housing Finance Ltd. It is the first scheme of LICHFL Housing and Infrastructure Trust, with LICHFL Trustee Company Pvt. Ltd. as its trustee, and LICHFL Asset Management Company as its investment manager.

Objective

Balanced returns

To achieve balanced returns by a threefold diversified investment strategy across different categories, stages and prominent location with one or more established growth drivers, of real estate assets in priority sectors of the growing Indian economy.

Focus Sectors

LHIF's focus sectors for investment

Affordable Housing

Affordable Housing

Healthcare

Healthcare

Education

Education

Industrial Parks

Industrial Parks

Warehouses

Warehouses

The selected categories are consumer driven and primary beneficiaries of the growing Indian economy with high demand supply gap. The sectors are included in the Harmonized list dated 30th March 2017 issued by Ministry of Finance, Government of India and enjoy priority sector status.

Investment Instruments

Range of instruments for periodic returns and capital appreciation

The Fund would invest in equity, equity related instruments, mezzanine instruments and debt instruments of the Portfolio Vehicles in conformance with the prevailing laws & regulations. The Fund would endeavor to provide its beneficiaries periodic return and capital appreciation by following prudent investment practice.

Approach

Creating value

The Fund intends to deliver superior returns by creating value in all stages of the investment process, thus helping to create the platform for long-term success.

Strategy

Comprehensive investment strategy

The investment strategy of the Fund includes investing with promoters that have proven track record, transparency and strength in execution, managing and marketing of assets. The Fund intends to target scalable Portfolio Vehicles that focus on critical opportunities in the above mentioned sectors, in various Indian cities and offer clear exit options.

Apart from the Sponsor’s network which is vast and spread across the length and breadth of the country and existing relationships with promoters to access proprietary deals, LICHFL AMC plans to also use its relationship network - including corporations, industry contacts, Indian-domiciled real estate development companies and regulatory institutions, investment banks, accounting, legal firms which gives access to large size market to source deals.

The investment strategy is intended to be driven with a focus on the following:
• Invest in cities with sound economic drivers;
• Suitably capitalize portfolio projects;
• Optimize returns by structuring investments;
• Setup a mechanism where portfolio projects can be closely monitored;
• Align interest of the investee company promoters with that of the Investors through profit share.

Exits

Tailored strategies for Appropriate Housing and Income Yielding Assets

Exits in Affordable Housing projects is aimed to be self-liquidating at the latter part of the projected investment tenure with possibilities of accretive interim period exit opportunities where substantial risks have been mitigated and cash flows have turned stable.

In case of Income Yielding Assets like Industrial Parks and Warehouses, Healthcare delivery and Education assets, post stabilization and maturity of asset, exits are usually achieved by hiving off assets at a capitalized return rate to yield seeking or strategic Investors or by listing in InvITs/REITs platform.

Promotor and Sponsor

One of the leading housing finance companies in India

LIC Housing Finance Limited is the Sponsor and Promoter of the Fund, committed to invest in the Fund, 10% of the aggregate Capital Commitments. LIC of India is a co-sponsor.

LIC Housing Finance Ltd. is one of the leading housing finance companies in India. Its main objective is providing long term finance to individuals for purchase or construction of house or flat for residential purpose / repair and renovation of existing flat / houses. The Company also provides finance on existing property for business / personal needs and also gives loans to professionals for purchase / construction of Clinics / Nursing Homes / Diagnostic Centers / Office Space and also for purchase of equipment. The Company provides long term finance to persons engaged in the business of construction of houses or flats for residential purpose and to be sold by them.

It has one of the widest networks of 245 marketing ofices and 7 regional offices across India. In addition the company has appointed over 11,452 Intermediaries to extend its marketing reach. 21 Back Offices spread across India conduct the credit appraisal and administrative functions. The Company has set up a Representative Office in Dubai and Kuwait to cater to the Non-Resident Indians in the GLCC countries covering Bahrain, Dubai, Kuwait, Qatar and Saudi Arabia.

The Company has existing relationship with leading real estate developers across India and an outstanding mortgage portfolio of INR.1,445 Bn. (INR 1,44,534 Crore) as on 31st March 2017 (Fy 17), higher by 15% on YoY basis. Disbursements grew from INR 361.5 Bn. (INR 36,151 Crore) as on Fy 16 to INR 415.4 Bn. (INR 41,541 Crore) as on Fy 17. More than 2 million customers have been serviced by the Company since inception. Average retail loan ticket size stands at INR 2.2 Mn.

The company has shown impressive growth which resulted in exponential appreciation in its stock price. The Company has won several awards for best housing finance company, most respected company and for best data quality.

LICHFL Housing and Infrastructure Trust

The first scheme of LICHFL Housing and Infrastructure Trust.

The Trust has been established as a private irrevocable contributory determinate investment trust under the Indian Trusts Act, 1882 and has obtained license with SEBI as a Category I Alternative Investment Fund - Infrastructure Fund under the SEBI (AIF) Regulations, 2012.