The untimely death of Ved Prakash Arya, founder and chief executive officer of Mumbai-based private equity and real estate firm Milestone Capital Advisors, at the end of August hit the Indian real estate and private equity worlds hard.
While contemporaries have been getting on with their businesses, Milestone itself faces perhaps its biggest challenge since Arya formed the firm in 2006. That includes finding a successor and, more importantly, persuading investors of its ability to move forward seamlessly with its existing strategies.
Speculation has arisen in the Indian press as to whether Arya officially was a ‘key man’ in relation to Milestone’s three solely managed real estate funds and two funds jointly managed with IL&FS Investment Managers, which combined have almost $1 billion in assets under management. Questions are being asked about the implications for the investors in these vehicles now that Arya is no longer alive.
Milestone declined to comment to PERE about whether it was in fact subject to key-man clauses, providing only a holding statement that detailed a managing committee arranged to “ensure the continuity of the company’s rapid growth, based on the vision and principles laid down by Ved Prakash Arya.” However, certain rival GPs familiar with Arya and Milestone said it was unlikely that the firm was subject to such clauses as they typically are not included in the documents of real estate funds raised with Indian capital.
In a draft prospectus filed last year with the Securities and Exchange Board of India for its proposed but unrealised public listing, Milestone said: “We depend substantially on our senior management and key management personnel, the loss of whose services would have a material adverse effect on our business…the loss of these personnel could jeopardise our relationships, especially with key investors in funds advised by us and members of the business community…” As Indian news service VCCircle pointed out last month, the text was part of a disclosure for a possible eventuality, but such language acutely underlined the importance of Arya to Milestone.
Nonetheless, the onus will now be on Milestone’s new managing committee – comprising director and managing partner Ashish Joshi, chief financial officer and head of risk management Paritos Kakkad, fundraising and investor relations director Navin Kumar and head of business strategy and portfolio management strategy Sumit Somani – to address any investor concerns about the future leadership of the company.
Joshi, a well-respected figure in Indian real estate, has been tipped as Arya’s likely successor. Whether by him or someone else, the task of appeasing the firm’s investors will be crucial to ensuring that Milestone can take on life after Arya without major hindrance