Milestone Captial Advisors, the Mumbai-based private equity real estate firm with $700 million of assets under management, has revealed to PERE current returns across its suite of eight international and domestic currency denominated funds.
Milestone has two offshore, US dollar-denominated funds and six onshore funds, all of which have either partially divested or have divestments scheduled over the next two quarters, according to the firm.
It has so far exited $77 million of its real estate investments, and has some $153 million of exits scheduled over the next two quarters.
Two of the firm’s oldest funds were closed in March 2008, and had fund lives of six to seven years. Its $50 million Milestone Domestic Scheme I and the $116 million IL&FS Milestone Fund I are posting IRRs of 15 percent and 20 percent respectively, and are expected to be more than halfway divested by the end of the year, according to the firm.
The firm’s two offshore funds are focused on mezzanine debt investments. The $75 million Milestone fund, closed in 2009, is now posting a 23 percent IRR, though it has only exited 8 percent of its capital. The $56 million IL&FS Milestone Core Plus Retail Fund has no exits as yet, but has $17 million of exits scheduled before the end of the year.
It is understood that these exits are to pave the way for another fund which Milestone is expected to launch in the next few months. Media reports have sized the fund at INR 500 crore (€62 billion; $82 million).
The firm’s funds management business was stalled in 2011 when the founder of Milestone, Ved Prakash Arya, was killed in a freak accident. It then began selling off its non-real estate businesses, including an approximately $2.6 million sale to Singapore’s Quadria Capital of its education and healthcare joint venture with Religare Enterprises, which was completed in March.
There were discussions with a number of international institutions to sell Milestone’s real estate business, as well, but according to Milestone director Navin Kumar discussions did not materialize into a sale. Milestone abandoned the sale just last month.
“There were buyers, but they were not doing total justice to [what] Ved had built,” Rubi Arya, the late founder’s wife and current 88 percent owner of Milestone, has told International Venture Capital Post. Milestone will now focus solely on real estate, particularly the residential sector.
“Real estate was always about 85 percent of what we did, even in the private equity business,” Kumar told PERE. Although the firm has now lost time on its funds, and return expectations for all of India have to be more “realistic” now, Kumar is still positive about the returns Milestone is already posting.
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