The head of Indiareit Fund Advisors, an Indian real estate fund and unit of drugmaker Piramal Healthcare, has decided to step down to explore setting up his own fund, sources familiar with the development told Reuters on Saturday.

Ramesh Jogani, managing director and chief executive officer of Indiareit, joined the company in 2005-06 and has since raised three domestic funds worth 19.5 billion rupees ($351 million) to invest in Asia's third-largest economy.

Jogani joins several other executives of Indian private equity funds that have resigned over the last 12 months to start their own fund to take advantage of limited funding options for debt-laden developers as banks are cautious about lending and international private equity funds look to exit investments.

When contacted a Piramal Group spokeswoman declined to comment, while Ramesh Jogani did not immediately return phone calls and text messages seeking comments.

Naresh Naik, head of Morgan Stanley's global real estate fund in India resigned in November and Manish Kejriwal, India head of Singapore state investor Temasek Holdings stepped down in September - both to set up their own funds. .

Others who left to start their own funds include P.R. Srinivasan, former India head of Citi Venture Capital International; Subbu Subramaniam, a former partner at Baring Private Equity India; Rajesh Khanna, former Warburg Pincus managing director and India head; and Ranjeet Nabha, former managing director and CEO of India operations at W.L. Ross.

Indiareit has been on the road to raise a $500 million offshore fund since February. The company has also started marketing a $225 million rental yield fund and raising a slum development fund of 5 billion rupees.

The Indian property market has proven tough for global private equity funds once captivated by its growth potential where developers promised double-digit returns but failed to deliver.

KPMG calculates $31.5 billion was invested in India by private equity funds during the boom period of 2006 to 2008, with less than 10 percent of that having exited as of the end of 2011. Typically, private equity investors look to sell off their investments in roughly five years.

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