At a time when US-based KKR and Blackstone are pouring millions of dollars in Indian properties, JPMorgan and Morgan Stanley, two of the biggest American banks, have put on hold their private equity (PE) investments in Indian real estate.
Though PE funds of most global investors such as Wachovia, Merrill Lynch, Citigroup either exited or became dormant in Indian real estate after Lehman Brothers crisis in 2008, JPMorgan and Morgan Stanley continued and were looking to raise new property funds.
JPMorgan, sources said, could not scale up real estate investments in India the way they wanted. For instance, they could raise half of the $600 million India-focused fund they set out to raise. Recently, Chanakya Chakravarti, managing director of global alternatives, real estate Asia, JPMorgan quit the company to join Canadian property investment firm Ivanhoe Cambridge as head of its India operations. JPMorgan invested in the country till early 2016. It had struck a deal with Pune-based Kolte Patil In December 2015 and reportedly struck a Rs 200-crore deal with Bengaluru-based Assetz Property Group in early 2016.
When contacted, a JPMorgan spokeperson said, “JPMorgan Asset Management has a long-standing presence in real estate in India, with an established team in place since 2006. We continue to focus on driving results for our clients, maximising investment performance and providing exceptional client service.” Morgan Stanley has also put on hold its PE investments in real estate in the country. It has put off plan to float a $500-million India-focused property fund, sources said. According to sources, Morgan Stanley was earlier in discussions with Mumbai-based Oberoi Realty to form a Rs 1000-crore joint venture (JV) to invest in the latter’s malls in Mumbai. But Oberoi Realty has shelved plans to float a JV and invest in malls through internal accruals and debt. Morgan Stanley did not respond to a mail on the subject.