An emerging trend in the real estate finance sector is that many senior executives from both domestic and global companies are quitting their jobs to start ventures. Industry experts say the growing demand for alternative investment fund capital for land purchases, driven by tighter regulation of non-banking financial companies, is a key driver of managers turning to entrepreneurship. He points out that it is a trigger.
In recent months, about half a dozen such executives have quit their jobs to start their own funds, with Nipun Sahni, a partner at U.S.-based investment giant Apollo Global Management, the latest example. .
Mr. Sahni is likely to set up a fund to invest in real estate. “Apollo has agreed to set up a real estate credit fund if Mr. Sahni decides to do so,” the person said.
“’Apollo’ was the best chapter in my 30-year career…I look forward to taking the next step as an entrepreneur,” said Sahni, who now owns Apollo’s entire real estate portfolio and He added that he advises on investments in the country.
Mr. Sahni has invested and managed over Rs 20,000 crore during his long career. He has led Apollo since 2015. Prior to joining Apollo, he led the national Merrill Lynch real estate fund. He has completed over 50 transactions including deals with Ascendas, Piramal, DLF, Lodha, Runwal, Sattva Salarpuria and Embassy.
Besides Sahni, Ankur Gulati, Mumbai-based managing director of real estate investments at Canada’s CPP Investments (CPPIB), also resigned after nearly a decade with the company. He is considering setting up a public equity alternative investment fund (AIF). When contacted, Gulati declined to comment.
Other real estate finance executives pursuing entrepreneurship include Ashish Singh, partner and head of India and Southeast Asia real estate at UK-based private equity firm Actis. Amar Merani, Chief Investment Officer and Head of Real Estate Assets at 360 One Asset; Avinash Sule, Chief Executive of Industry, Logistics and Hospitality at development and investment company RMZ. Chanakya Chakravarty, Head of Asia Pacific Indirect Investments at Ivanhoe Cambridge, the real estate arm of CDPQ.
Mr. Singh may take up an entrepreneurial role after his move from Actis, the people said, adding that he is expected to remain with the company until the end of next year.
Melani, who is currently completing his notice period with 360 One Asset, is believed to be considering launching a fund, starting a proptech company, or both, according to people familiar with the matter. Melani, who previously worked at Xander Finance, could not be reached for comment.
Motilal Oswal Alternatives real estate fund CEO Sharad Mittal resigned last year to set up his own fund management company.
Shobhit Agarwal, managing director at Anarock Capital, said senior executives at financial companies have been busy refinancing for the past 10 years, after which they started getting involved in stressed assets. “Well, there’s very little work left. They were used to high activity, but now it’s slowing down. That’s why they’re turning to self-funding,” Agarwal said. .
Efforts are also shifting from the private side to the public side as more companies go public, he said. Another senior executive who recently quit his job said that after the 2018 IL&FS crisis, NBFC activity in the real estate sector has slowed down and demand for AIF funds has increased due to less regulation of these entities.
“While NBFCs have restrictions on lending for land purchase, AIFs have no such restrictions. That’s why people are looking at variable self-funding,” he said, adding that since 2015, It added that towards 2016, many senior executives in the real estate industry left and joined NBFCs due to high demand for funds in NBFCs.
