Prime Securities Ltd has officially entered the alternative asset management sector with the launch of the Prime Litmus Real Estate Opportunities Fund, a Category II Alternative Investment Fund (AIF) registered with the Securities and Exchange Board of India (Sebi). The new fund aims to capitalize on the growing demand for structured credit in the real estate market, particularly in under-construction residential projects. This expansion marks a significant shift for Prime Securities, which has spent three decades in investment banking and financial services. The fund is targeting an initial corpus of ₹750 crore, with a greenshoe option to increase this by an additional ₹250 crore.
The launch comes at a pivotal time for the real estate sector in India, where funding conditions for developers have become more stringent. This scenario has heightened the appeal of private credit solutions, which are increasingly sought after by project developers hoping to navigate financial constraints. Prime Litmus Investment Management, the organization behind the fund, is a collaboration between Prime Research and Advisory Ltd, a subsidiary of Prime Securities, and Litmus Global Services LLP, which specializes in real estate investment advisory. The fund will primarily focus on investments within major metropolitan regions, including the Mumbai Metropolitan Region (MMR), National Capital Region (NCR), Bengaluru, Chennai, Hyderabad, and Pune.
According to Rahul Rai, the managing partner at Prime Litmus Investment Management, the rising demand for institutional structured capital is a response to the tightening of traditional funding avenues for real estate developers. The fund is projected to have a six-year tenure, extendable by one year, and is aiming for an annual internal rate of return (IRR) between 18% and 20%. The investment strategy involves evaluating and executing approximately 12 to 15 transactions over a two-year period, with individual deal sizes ranging from ₹50 crore to ₹150 crore. This approach is designed to create a scalable, governance-led platform that addresses the evolving needs of the Indian real estate market.
As the real estate landscape continues to evolve, characterized by increased consolidation and formalization, the role of intelligent capital solutions becomes more critical. Apoorv Kumar, managing partner at Litmus Global Services, emphasized the necessity for such solutions as market dynamics shift, with buyers increasingly prioritizing quality and timely delivery. The Prime Litmus Real Estate Opportunities Fund aims to meet these demands by providing solution-oriented capital that effectively balances risk and return. With its strategic focus on structured credit investments, the fund is poised to play a significant role in shaping the future of real estate financing in India.