BackMilestone Capital inks first deal from new real estate fund
Milestone Capital Advisors invests Rs40 crore in a residential project in Thane, marking its first investment from its new Rs500 crore fund, said a top executive
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Bengaluru: Milestone Capital Advisors Ltd has invested ₹ 40 crore in a residential project in Thane, near Mumbai, marking its first investment from its new ₹ 500 crore fund, said a top executive.
The private equity firm has bought apartments in bulk for ₹ 40 crore in realty firm Rajesh LifeSpaces’ under-construction project Raj Tattva.
“The capital has been given in the form of structured debt with downside protection, targeting an IRR (internal rate of return) of 22% at the fund level. In this fund, we are looking at more control and security in each transaction, targeting good returns," said Milestone Capital’s vice-chairman Rubi Arya.
The spokespersons of Rajesh LifeSpaces could not be reached on phone.
Milestone is currently raising its new fund, and has done a first close, or raised the first ₹ 120 crore.
Arya said the target is to raise the full corpus by March 2016 and then deploy the capital over the next year from then.
Private equity funds invested about $2.4 billion in the real estate sector, across 53 transactions, between January and September this year, surpassing the full-year investments of $2.1 billion in 2014 across 80 deals, according to data from VCCEdge which tracks investments.
In May, Milestone achieved its largest exit when global private equity fund Blackstone Group Lp bought a commercial office project in suburban Mumbai for ₹ 1,060 crore, paving an exit for IL&FS Milestone Realty Advisors Pvt. Ltd and HCC Real Estate Ltd. IL&FS Milestone, which had a 74% stake in the project, is expected to have exited with around 25% gross internal rate of return.
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