Hong Kong: Millennium Spire, the real estate investment arm of London-based Millennium Global, aims to launch a $350-$400 million fund by the fourth quarter of 2009, as fundraising activity picks up following last year’s credit crunch.
The new fund will invest in the Indian real estate sector as did Millennium’s first, $60 million fund in the region which was launched in 2007, Abhijeet Bhalla, managing director with Millennium Spire Asset Management, told Reuters.
Millennium hopes to close the fund in the first half of 2010.
Under an initial blueprint, Millennium is to invest up to $1 billion, primarily in the residential sector, in high-growth cities stretching from Delhi in northern India to Coimbatore in the south.
“Real estate in India just fast-forwarded from very ad hoc to something that was growing at a frantic pace without going through the evolution that we saw in the telecom sector,” said Bhalla.
“This was our concern, that the sector was not being driven by fundamentals but by insane capital growth.”
Millennium decided to phase its investment into at least three parts, “(giving) us time to test out our strategy”, said Bhalla.
The fund has grown 44% since its launch in 2007 and its only negative quarter was the second three months of 2009. It has a target rate of return in excess of 25% over its five-year lifespan.
Emerging market focus
The asset manager is now looking to expand to other emerging markets.
Millennium Spire will start exploring real estate opportunities Brazil in 2010, leverage its parent’s investment footprint to break into Africa and scout around for joint venture partners in China, said Bhalla.
Millennium Global Investments is an independently-owned alternative investment manager established in 1994 which managed $11.4 billion in assets from institutional investors as of end June 2009.