ICICI Pru Office Yield Optimiser
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of ICICI Pru Office Yield Optimiser
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
For investors seeking returns that are not co-related to the equity markets, this is a fairly decent option. The office yielding strategy of investing in leased office assets, to earn a recurring rental yield, with the potential for capital appreciation boosting returns to the mid-teens does have merit. This fund uses leverage & a tactical allocation to increase yields further to 15-18%, but this does come with an increased level of risks that investors should consider prior to investing.
Strategy
Leveraged Office Yielding Strategy (15-18% Indicated Returns)
Fund's Strategy View
The fund targets mid-sized commercial RE, with minimum 70% exposure to pre-leased assets and limit tactical opportunities (near completion) to 30%. While typical office-yielding funds have relatively lower risk, there are 2 elements of the strategy that do bring in a certain level of risk - (a) 30% exposure to near-completion assets & (b) leverage at an asset level without any recourse to the fund. These additional elements (near-completion assets & leverage) help boost returns, but can lead to downside risks in case of any completion or lack of occupancy risk, which investors do need to consider.
Fund Performance
Most high-yield debt funds are close-ended. Funds that are open for subscription are new funds without a past performance track record - investors need to be careful about considering performance of previous fund series to new funds (since the underlying investment environment may have changed considerably).
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| ICICI Pru Office Yield Optimiser |
Performance as of: 31-Jan-26 | Inception Date: 30-Jun-24 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Nimesh Shah | 4-star rated FM
CEO | 32 yrs Experience | 19 yrs at current firm
Past Experience: ICICI Bank
Nimesh Shah joined the Company in July 2007 as Managing Director and Chief Executive Officer. He has been instrumental in laying a foundation for building a superior asset management firm. He has over 30 years of experience in the banking and financial services industry. Prior to his current role, he was serving the ICICI Group as a Senior General Manager at ICICI Bank where he held several key roles in project finance, corporate banking and international banking functions. He is also a Director of the Mutual Fund industry trade body AMFI and a Chartered Accountant by qualification.
Rahul Rai | 4-star rated FM
Head RE | 35 yrs Experience | 15 yrs at current firm
Past Experience: SUN-Apollo Real Estate Advisors, E&Y
Rahul Rai joined the AMC in November 2010. With over 24 years of experience spanning Real Estate Investments, Corporate Finance and Tax & Regulatory assignments, he leads the Real Estate business practice at the AMC. Prior to joining the AMC, Rahul worked with SUN-Apollo Real Estate Advisors as Principal with the responsibility over the entire life cycle of the investment. He has also worked at Ernst and Young where he headed the Real Estate transactions practice and prior to that has worked with Arthur Andersen. Within the real estate sector, Rahul has exposure across all product classes and cities and has strong relationships with leading developers. He is a Chartered Accountant and Cost Accountant. He is a graduate in Commerce from Mumbai University.
Shekar Daga | 4-star rated FM
Head Pvt Capital | 27 yrs Experience | 5 yrs at current firm
Past Experience: Aion Capital, ICICI Bank
Shekhar Daga is the Head- Private Capital at ICICI Prudential AMC. In a career spanning over two decades, Shekhar has handled entire gamut of investment management across corporate lending, structured finance, private equity, special situation and distressed debt. Previously, he was a partner at AION Capital and served on the board of multiple portfolio companies including Clix Capital. He was earlier with ICICI Bank in their Structured finance and distressed debt group. Shekhar is a rank holder CA from Institute of Chartered Accountants of India.
Paul Parampreet | 3-star rated FM
Head - Long Short | 21 yrs Experience | 2 yrs at current firm
Past Experience: Franklin Templeton (PM), Edelweiss (Associate Director)
Paul Parampreet joined ICICI Pru AMC in May 2024 and currently serves as a Fund Manager for Alternatives, where he is responsible for investment research and strategy design for AIF portfolios. He brings over 15 years of experience in financial services. Prior to ICICI, he worked as a Client Portfolio Manager at Franklin Templeton across the UK and India, managing multi-asset client portfolios and advising institutional investors on asset allocation. Earlier, he served as Associate Director – Strategic Investments at Edelweiss Group and was Vice President and Head of Equities at Edelweiss Asset Management, overseeing multiple equity mutual fund strategies. Paul holds a PGDM from IIM Calcutta and a Bachelor’s degree in Electrical Engineering from IIT Kharagpur.
IME's Review of ICICI Pru Alternatives
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
ICICI Pru Alternatives, part of the ICICI Group, has developed a formidable position for itself in the Alternatives space - with a presence across Real Estate, High Yield Debt, Long-Short & Unlisted funds. While all AMC's that are part of larger financial groups do face the risk of team churn, ICICI Alternatives represents one of the better Alternative brands to be working with, and their size & pedigree does help them attract high-quality talent in case of the departure of any of their senior members.
AMC's Pedigree
ICICI Pru Alternatives is amongst the oldest alternative managers in India, and has built up a strong presence for itself across a wide range of Alternative fund categories. it is amongst the more pedigreed Alternative managers working out of India.
AMC Team
Rahul Rai (Head, RE) comes with 3 decades of RE experience and corp banking + Nimesh Shah (3 decades of banking) + Shekar Daga (Head, Pvt Capital) with 2 decades of experience across corp lending, structured fin, PE, special situation and distressed debt
Investment Philosophy
Large Alternative AMCs have distinct investment philosophy for various offerings they come up over time. The primary focus is the value-add in the alternatives space for investors.
Investment Strategy
ICICI Prudential Office Yield Optimiser Fund II is a Category II AIF that focuses on pre-leased, income-generating commercial real estate assets in India’s top business hubs. The fund aims to generate stable rental income and capital appreciation by investing in Grade A office properties with strong tenant profiles
Core Investment Approach
Investment in Income-Generating Office Spaces:
- Targets mid-sized commercial real estate properties with high-quality tenants.
- Focuses on pre-leased office spaces with long-term rental agreements.
Prime Locations with Strong Leasing Demand:
- Investments in Mumbai, Pune, Bangalore, Chennai, Hyderabad, and NCR, where office leasing remains robust.
- Selects assets in high-demand micro-markets with limited new supply.
Structured Portfolio Allocation:
- 70%+ exposure to pre-leased office properties for stable rental yields.
- Up to 30% in completed but vacant properties with high leasing potential.
- Not more than 25% exposure to a single investee company/tenant to reduce concentration risk.
Exit Strategy & Yield Optimization:
- Generates rental income (4-5% yield) plus capital appreciation (7-8%).
- Expected total returns of 15-18% IRR through rental growth and asset revaluation.
- Exit through REITs, institutional sales, or strategic buyouts after 5-6 years.
Risk Mitigation & Tenant Quality:
- Targets AAA-rated corporate tenants and MNCs, ensuring rental stability.
- Diversified portfolio to minimize vacancy risks and maintain liquidity.
AMC Background
ICICI Prudential Alternatives AMC is a leading asset manager with deep expertise in real estate, unlisted, high-yield and long-short strategies via its AIFs. It is backed by ICICI Pru AMC, which is the top-3 asset managers in India, known for managing mutual fund assets.
Investment Philosophy
Large Alternative AMCs have distinct investment philosophy for various offerings they come up over time. The primary focus is the value-add in the alternatives space for investors.
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