LICHFL Real Estate Debt Opportunities Fund – I (LRDOF) | LICHFLAMC

LICHFL Real Estate Debt Opportunities Fund – I (LRDOF)

Third Fund launched by the LIC group’s Fund house.

LRDOF-I is a SEBI registered alternative investment Fund- category II, ESG themed, alternative investment debt impact Fund, focused on early-stage investment in the growing Indian housing sector majorly in affordable housing and SME’s developing mid-income housing projects.

Corpus

Proposed corpus is INR 3,000 Crore (USD 375 Million) including green shoe option of INR 1,000 Crore (USD 125 Million).

Tenure

Investment tenure in any one portfolio company to be between 3 to 6 years. Term of LRDOF-I is 8 years.

Target Investors

Target investors would include domestic & overseas Investors including Development Finance Institutions, Pension Funds, Sovereign Fund, Impact Funds, Fund of Funds, Corporates, Insurance companies, Banks/Financial Institutions, Government institutions, Family Offices, Fund AMC’s, Ultra - High Net worth Individuals.

Returns

Hurdle rate of 10% for INR investors and 8% for USD investors.

Targeted IRR at portfolio level is ~20%+ plus upside (based on business performance), secured by charge on assets, promoter share pledge, guarantees, cashflow hypothecation.

Forums

Charge would be registered in 3 forums:
1) Sub-registrar office regarding mortgage of land,
2) Charge in ROC/ Ministry of Corporate Affairs, and
3) RERA website.

Exits

Exits targeted to be achieved by self- liquidation and not dependent on secondary sale or IPO listing.

Strategy

Fund would follow a proven investment strategy for capital protection backed by hard assets, with distributable cash cover > 2.5X and valuation multiple > 1.5X of invested amount.

Investment in project specific vehicles (private limited company) to insulate from collateral damage.

Management

Skilled management team with average experience of over 20 years and combined experience of over 200 years.

Robust risk mgt. by 3 level due diligence process, active monitoring, rights on reserved matters, use of ERP, periodic site visits, choice in appointment of technical & internal auditors, control of sales & bank accounts.

Access to promoter’s vast infrastructure including 300+ home credit offices, and proprietary deals due to strong relations with the Indian developer’s community.

Investor Charter

Investor Charter as per SEBI Circular dated December 10, 2021

Investor Charter - LRDORF