REAL ESTATE & INFRASTRUCTURE

At Gateway, we have identified infrastructure sector in developing markets, as one of the areas where large amount of capital can be deployed successfully by institutional investors to generate superior long term returns.

In India, backed by several positive factors such as sustainable GDP growth, favorable demographics, lack of adequate infrastructure to meet the growing demands of business & population, etc, it is estimated that close to $ 350 - 400 billion is required to be spent by the infrastructure sector over the next 5 years.

We anticipate that, during this period, a lot of investment opportunities will arise for institutional investors to invest through the Foreign Direct Investment route in areas such as:

• Roads & highways

• Power plants

• Airports

• Railways

• Real Estate

• Ports

• Special Economic Zones

• Water & Sanitation

• Urban infrastructure

• Healthcare

• Hospitality & tourism

• Education

For instance, in toll roads, the total size of the opportunity is pegged at around $ 92 billion. The toll road model has already proved to be successful, with existing players including a few listed mid cap companies, generating positive cash flows and superior double digit returns on their capital employed.

To strengthen our capabilities in this area, we have entered into a MoU with the transaction advisory division of the leading infrastructure consultancy company in India, owned by 3 large institutions with a deep presence in this sector. Through its 63 offices and 855 employees in India, its spectrum of integrated infrastructure services is the most comprehensive in the industry. 17 of India's 50 biggest listed companies are its clients. So are 25 of India's 29 state governments and 3 of India's seven Union territories. In the last 3 years alone, 14 of the Fortune 500 companies have become its clients, testifying its leading position in the infrastructure consulting in India.

We also work closely with a boutique project management company in the UAE, who are currently working on some of the large prestigious projects in UAE, Libya, etc. This gives our clients the ability to conceptualize, fund, execute, and manage their infrastructure projects on time, on budget and within quality.

Some of the opportunities in this sector can be classified as under:

• Opportunities at a project SPV level and/or holding company level. For example, in real estate, power projects, toll roads, etc.

• Private equity opportunities in infrastructure services companies.

• Opportunities to participate in green field ventures in areas such as healthcare, alternate energy, power, etc.

• JV Opportunities for asset management firms to partner established infrastructure players to set up funds and coinvestment vehicles for their clients.

The minimum investment period in this sector can range as low as 2 - 3 years for real estate projects to 4 - 5 years for power projects and toll roads. Areas like healthcare, airports, etc have a much longer gestation period and the investment period can stretch up to 8 or 10 years.