ICICI Pru Office Yield Optimiser
ICICI Pru Alternatives | Debt | | AIFIME's View on ICICI Pru Office Yield Optimiser
Strategy
Leveraged Office Yielding Strategy (15-18% Indicated Returns)
Investment 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.
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
We refrain from evaluating the fund since it is yet to mature (less than 5 years).
IME's View on ICICI Pru Alternatives
View on AMC
ICICI Pru Alternatives is part of a highly respected financial house in India. The AMC backs that up with strong team pedigree, and years/large AUM of execution in alternatives space.
AMC's Pedigree
AMC is backed by strong experience in real estate with 4245Cr managed assets across 77 inv over the past 16 years.
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.
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| ICICI Pru Office Yield Optimiser |
Performance as of: 30-Sep-25 | Inception Date: 30-Jun-24 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Rahul Rai | 4-star rated FM
Head RE | 34 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 | 3-star rated FM
Head Pvt Capital | 26 yrs Experience | 4 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.
Nimesh Shah | 4-star rated FM
CEO | 31 yrs Experience | 18 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.
