CDC Group, a US government-backed private equity fund of funds focused on emerging markets, has invested $250 million (€161 million, £127 million) to three funds for infrastructure and real estate investment in India.
The firm has invested $100 million in the IDFC India Infrastructure Fund, a vehicle targeting infrastructure projects in the energy, transportation and telecoms sectors. The fund, which will be looking at deals in the $15 million and $75 million range, will be managed by IDFC Project Equity, a newly established subsidiary of Mumbai-based infrastructure financial intermediary Infrastructure Development and Finance Company.
The firm has also invested $100 million in the Actis India Real Estate Fund, which will make investments of between $15 million and $25 million in lower middle income residential, healthcare, hospitality and commercial real estate in and around large cities in India. That fund is the first for Actis, an emerging markets private equity investor.
Lastly, the firm has invested $50 million in the Kotak India Realty Fund, which will make acquisitions worth between $15 million and $25 million in real estate projects and companies across India. It is the second real estate fund launched by Indian financial institution Kotak Mahindra Group.
Together, the three funds are expected to raise a total of $1.6 billion for investment in infrastructure and real estate in India.
Infrastructure investment in India has become one of the hottest investment sectors globally. The Indian government has estimated that a further $320 billion of investment in infrastructure will be needed by 2012, a majority of which will need to come from private investors. Approximately $160 billion has been invested in infrastructure in India over the past five years, with 25-30 percent of this spend in private sector investment, according to IDFC.
3i Group recently held a final close on its India-focused infrastructure fund at $1.2 billion (€753 million), 20 percent above its initial target. In March, Mumbai-based investment firm Quantum Equity Advisors launched a $500 million infrastructure fund. In February, Kotak Investment Advisors launched a $1 billion fund for Indian infrastructure. And in February of last year The Blackstone Group teamed up with Citigroup and the Infrastructure Development Finance Company to form a $5 billion Indian infrastructure fund.