DREAM Fund – I

ArthVeda has exited all its investments from its maiden real estate fund, DREAM FUND in June 2015.

Launched in 2006, DREAM Fund I raised domestic capital from banks and institutions, affluent individuals and corporate houses. It made a total of 13 investments across residential, commercial and mixed-use developments and claims to have generated annualised returns, or internal rate of return (IRR), of 17 per cent.

“A 17 per cent return, over a seven-year period, may not look that impressive in absolute terms, but it is indeed an incredible performance compared to what other real estate funds have delivered to their investors,” Arthveda CEO Bikram Sen said.

Sen claimed that his maiden fund is the second best real estate fund in India in terms of returns based on a study conducted by one of the Big Four consulting firms. The study was done under Arthveda’s mandate.

The study also showed that a large number of funds are yet to return 100 per cent of the capital to their investors, Sen claimed. He added that the ones who did return the principal amount managed to churn out single-digit IRRs.

The reason why a lot of capital is still stuck in real estate is because of size of investment. Investors, during 2005-07, backed mega projects in metro and tier II cities, making it a difficult task for them to create profitable exits.