Singapore - Private equity fund KKR & Co said on Thursday it had set up a non-banking financial company in India for lending to the real estate sector, with an investment from Singapore sovereign wealth fund GIC.
This would be GIC's third investment in India's real estate sector in two months.
In December, GIC announced it plans to buy a controlling stake in Mumbai-based real estate firm Nirlon Ltd. for around US$200 million. Nirlon, listed on the Bombay Stock Exchange, owns Nirlon Knowledge Park, an office complex spread over 3.3 million square feet in Mumbai.
Earlier the same month, GIC entered into a joint venture with Indian firm Vatika Group to develop two residential projects in the suburbs of Delhi.
"GIC is confident of India's growth potential over the long term," Loh Wai Keong, co-head Asia at GIC Real Estate, had said in a statement at the time.
For KKR, it will be its second non-banking finance company (NBFC) in India, it said in a statement.
KKR said it saw that India's large and growing business community welcomes non-traditional entities that allow companies to tap into a more sophisticated capital markets system and provide them with greater choice beyond traditional equity or bank loans. Since 2009, KKR has extended more than US$2 billion of structured financing to 21 business groups in India through its credit and capital markets business.
During 2014, KKR entered the real estate business in India by structuring and participating in three transactions with an aggregate amount of approximately US$190 million.
In private equity, KKR has been active in India since 2006, with total equity investments exceeding US$1.5 billion.
Since launching a dedicated real estate platform in 2011, KKR has committed over US$1.8 billion of equity to 29 real estate transactions in the US, Europe and Asia.