IPAL Redevelopment Fund-1


Last updated 12 May 2020, by Impactyield.

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IPAL Redevelopment Fund-1 targets redevelopment projects in Mumbai's slums and old buildings. Primary benefits include the building of free on-site housing for slum dwellers, delivering benefits of formal property rights, access to sanitation, and legal water and electricity.

The favorable economics are facilitated by regulatory incentives that allow a portion of the former slum land to be commercially developed and monetized, thereby subsidizing the free rehabilitation for slum dwellers on the remaining area; and generating a market return for the developer and investors.

The fund is targeting a $300m capital raise, with sponsor capital already invested in two ongoing projects that serve as proof of concept investments worth $12m.

Asset class


Fund style

Not listed

Financial description

The fund seeks market returns: 25% unlevered IRR (2.5 – 3x Money Multiple) on primarily equity investments. Potential DFI funding is also being explored and if secured, would commensurately improve the above return targets.
A highly conservative strategy focuses on layers of downside protection that include low acquisition cost, negligible project-level debt, collateral, and early exit options.
Economics: Redevelopment projects are structurally advantaged to vacant land projects; due to low land acquisition costs accruing from the "regulatory subsidy".
Negligible Debt: Since pre-sales from the commercially monetizable portion (typically residential condos) finance remaining project costs, they effectively de-risk the investment by rendering significant (and expensive) construction-borrowing unnecessary.
Overpaying for "Greenfield" land in supply-constrained Mumbai, and utilizing debt to boost returns, has carried high risks for the long term investor. Redevelopment avoids both these pitfalls.
The net effect is a capital-lite project which effectively improves IRR; and negligible debt which provides resilience during unforeseen cost escalations and market corrections.
Investments are further structured with late entry, full independent collateral during the early slum clearance phase, early exit options, and other priority rights to ensure prudent conservatism and capital protection. A low-fee structure further ensures investor alignment

7 years

of track record


the year funded

300,000,000 USD


Asset manager

IPAL Fund Managers


Headquarters location:

SDG goals

SDG targets

Equal rights to ownership basic services technology and economic resources

Safe and affordable housing

Key performance indicators

Fund overview

Asset manager: IPAL Fund Managers

Product track record: Fund has 7 years of track record

Target IRR: 25%

Committed Capital: 12,000,000 USD (US Dollar)

Target return category: Risk-adjusted market-rate of return

Fund domicile:

Product status:


Inception year: 2016

Vintage year: n.a.

Target region: , , ,

Target close date: n.a.

Product term: 7+1+1

Assets under management: 300,000,000 USD (US Dollar)

Investment size: Min: 10,000,000; Max: 30,000,000; Avg: 15,000,000

Co-investment policy:

Currency of investments:

Currency for fund / product figures:

Fund investments to date: 2

Fund investments to date exited or repaid: 0

Management fee: 1.5%

Carried interest: 20%

Hurdle rate: 12%%

GIIN Investors' Council Investment: No

Limited Partners / Investors: n.a.

Limited Partner / Investor Type: Development Finance Institution (DFI), Endowments/Foundations, Family Office, Pension Funds, Other Institutional Investors


E-mail: n.a.

Website: http://www.ipal.co.in

Phone number: +1 512 925 8708

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Impact Performance


Impact thesis

The core of slum redevelopment is providing free housing - on site - to authorized slum dwellers, via private capital. Thus improving living standards from urban squalor to high rise flats.
Prime to the Fund is the reputation and rehabilitation track record of the developer. A further filter is investing only after the mandatory 70% vote of the slum co-op, and the regulator approvals are in place. Mumbai law requires slum dwellers to prove residency since 2000 (formerly 1995), so about 95% of slum dwellers get rehabilitated.
Impact of slum redevelopment:
1. Formal Property Rights:
Slum dwellers move from quasi-legitimate structures with no formal rights, to a 269 sq.ft self-sufficient flat; with a right to sell or rent it out after 10 years.
2. Sanitation and Utilities Access:
Each family gets access to its own bathroom, versus earlier ratio of over a hundred people sharing a slum toilet.
3. Women’s Empowerment:
Under a progressive law by the Slum Rehabilitation Authority, women of the household are listed as joint owners, to ensure that they have equal rights to the new property. In addition, the managing committee of the new co-op has to comprise a minimum of 1/3rd women
4. Social and Financial Inclusion:
The new home is a very tangible asset that has been shown to provide immense dignity and upward mobility. Property ownership also brings slum dwellers into the organized financial sector.

Impact Management


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