Toro Finserve launches healthcare real estate fund worth $500 million

The fund will invest into stabilised healthcare real estate providing long-term leases from stabilised assets such as hospitals, diagnostic centres, rehab facilities

Toro Finserve has launched India Healthcare Opportunities Fund (IHOF) as SEBI Alternative Investment Fund under Category 2. The fund was launched by Kapil Khandelwal, an investment and healthcare industry veteran, who is the Managing Partner of the fund.

The total fund corpus will be $500 million (corpus of $250 million with additional leverage of $250 million). The fund will invest into stabilised healthcare real estate providing sticky long-term leases from stabilised assets such as hospitals, diagnostic centres, rehab facilities and assisted living facilities with established healthcare operators in tier-I and tier-II cities in India.

Outlining the investment opportunity, Khandelwal outlines, “Total value of healthcare real estate already built is of over $120 billion with less than five to seven per cent operating under asset light model. Further $200+ billion is expected to be spent on development of healthcare infrastructure for India to come to the international norms in terms of real estate to get to Indian government’s target of three beds per 1,000 people by 2025. Our fund expects to create and invest in healthcare infrastructure where institutional investments in healthcare infrastructure has been shy and selective around a few chains of private hospital so far. Indirectly, we are also creating social impact through raising the supply of scarce healthcare infrastructure in our country.”

The fund has an investment and advisory committee that includes: Dr Arvind Lal, Chairman, Dr Lal’s Pathlabs; Kewal Handa, Ex Managing Director, Pfizer, India; Dr Sampath Shivangi, Ex Chairman, Association of American Physicians of Indian and recent Pravasi Bharat Awardee, 2017; Dr Sathya Kallur, entrepreneur and dentist to celebrities in the US and founder of Swiss Smile in India.

The fund has commitments of $110 million from some state governments in India, UHNIs, Fund of Funds from abroad. It is expected to start its formal road show in India and abroad in June-July 2017. The fund is in discussions with various banks and financial institutions for lease rental discounting (LRD) and leverage and distribution of the fund.