Business Case Studies & Business Publications

RISING SUN TOWERS: PRIVATE EQUITY INVEST...

Karan Bhanot

Case

RISING SUN TOWERS: PRIVATE EQUITY INVESTMENT IN RESIDENTIAL REAL ESTATE

Karan Bhanot

ISB176 | Published September 15, 2019 | 16 pages Case

Collection: Indian School of Business

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In December 2010, Shridhar Sethuram was evaluating an investment in a joint development of residential flats in Gachibowli, an information and technology (IT) hub near the city of Hyderabad in central India. Sethuram and his team at AMII Advisors, a private equity (PE) investment firm, had recently raised US$170 million with a mandate to invest the funds in the real estate market in India. Sethuram, on behalf of his investment firm, had to decide whether to invest in the Gachibowli project and how to structure the investment deal. This case is written from the perspective of a decision maker at a private equity investment fund. It provides a look at the manner in which a private equity real estate fund evaluates an opportunity and structures a real estate investment in a developing country. The case is set in India, where a large corpus of capital sourced from the US has been deployed since the early 2000s.

The case explores the rationale for international investment and typical issues that arise when dealing with developers. Students assess the rationale for the investment the case protagonist is considering, the risks associated with the project, the potential returns to investors, and the structure of the investment.