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American entrepreneur Raj Vakharia has announced the launch of a private
equity fund, which will invest $250 million worth of United States
institutional capital into India's booming real estate market.
The former assistant state treasurer of New Jersey -- who has worked in
senior positions on Wall Street and is presently the co-chairman of Uni-Mart,
a former American stock exchange company and the nation's 30th largest store
chain with sales in excess of $550 million annually -- said the fund will
aggressively capitalize on the rapid growth and opportunity in India's real
estate market.
The fund will invest in a broad range of commercial and residential real
estate, including hospitals, educational institutions, single-tenant
properties, retail real estate, apartments and infrastructure. It will
target its investment into high-growth markets throughout India like Mumbai,
Bangalore, Chennai, Pune, and Delhi.
Rajkot-born Vakharia said he would leverage the equity to deploy over $750
million in India over the next three to five years. "The market in India is
hot with a lot of retail projects like malls in this country (happening),"
Vakharia said. "Office spaces are being built for American and other
companies moving to India, and in response to demands from the affluent
middle class. So, there is a great opportunity now to invest in India and
make money."
Construction and development projects in India had become considerably more
attractive to investors abroad ever since the Indian government decided to
allow greater foreign direct investment explains Vakharia. "Also, previously
full repatriation of profits was not allowed, but now with the change in
regulation that could be done as well and I think that is great news."
The entrepreneur said he was not going to India with NRI investment, but as
a US institutional fund. "This fund has nothing to do with Uni-Marts,"
Vakharia said. "I am doing it under my Reliance Properties, a real estate
firm specializing in residential and commercial development throughout the
New York/New Jersey region."
Vakharia's fund is expected to enter into a co-investment agreement with a
major financial institution in India. He would not name the institution, but
said he was leaving for India to negotiate with the Mumbai-based entity.
"The fund's goal is to provide financing for the development of world-class
properties and to assist in furthering India's economic expansion. I am
excited about the opportunity to form strategic alliances with some of
India's top financial and real estate institutions. The next few years
should be a time of outstanding growth for India."
Vakharia, who came to the US in 1976 and earned a degree in business
administration, spent over 25 years in the real estate capital markets on
Wall Street and in the government. He was formerly managing director of real
estate for the investment banking firms Credit Suisse First Boston and
Donaldson, Lufkin & Jenrette. After he left Wall Street, then governor of
New Jersey James McGreevey appointed him as assistant state treasurer, thus
making him the first Indian American to hold such a high post in the state.
In that position, he advised the government on the $70 billion in
investments and $18 billion in public debt. Uni-Mart, which he bought into
in July 2004, is a convenience/gasoline station chain of 282 outlets on the
East Coast in the US.
Report dated September 7, 2005 courtesy www.nri-worldwide.com
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