More hedge funds are finding their way to the Indian property market. Och-Ziff Capital Management, one of the leading global hedge funds, has picked up 25% equity stake in Nitesh Estates, a Bangalore-based real estate firm, for Rs 250 crore.

The transaction marks one of the biggest deals done by a hedge fund in the Indian real estate space in recent times.
Confirming the development, Nitesh Shetty, managing director, Nitesh Estates, said, “We have just concluded the deal. As per the agreement, Och-Ziff will buy out 25% stake in the company for a consideration of around Rs 250 crore. The funds will be used for our expansion activities.” Ernst & Young was the advisor to the deal.

The US-based Farllon Capital was the first hedge fund to enter Indian real estate space when it had picked equity in the Indiabulls property few years ago. George Soros’ Quantam Fund is also active in real estate. Och-Ziff Capital was started in 1994 by ex-Goldman Sachs executive Daniel Och and Ziff Brothers.

Last month, Citigroup Property Investors tied up with Nitesh Estates to invest $100 million to build a 250-room luxury hotel Ritz Carlton on Residency Road, the heart of Bangalore’s central business district. Sources say Citigroup has already committed $30 million as the first tranche of investment.
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