The Final Milestone: One of India's early PE investors sells last two funds

Milestone Opportunities Fund 10 and Milestone Commercial Advantage Fund are registered private equity (PE) funds with combined assets under management valued at around Rs 1.5 billion

Think of it as the last remaining milestone. 

After negotiating for six months, Milestone Capital Advisors sold its last remaining assets this Monday for an undisclosed amount to Edelweiss Alternative Asset Advisors — an asset management arm of Edelweiss Financial Services.

The assets — Milestone Opportunities Fund 10 and Milestone Commercial Advantage Fund — are registered private equity (PE) funds with combined assets under management of around Rs 1.5 billion, comprising high-yield debt with developers Shriram Land and Rajesh Lifespaces, floor-space in The Capital, a building in BKC (Mumbai), and a 150,000 square feet IT building at Kharadi in Pune, which is leased out to corporate tenants. 

At its peak, Milestone Capital had raised Rs 40 billion and was one of the first PE players to get permission to list on the stock exchange. It had filed its DHRP in 2010, although it never listed.

Founder Ved Arya, who had earlier worked with the Future Group, got to know the real estate world well, networked with that universe and found gaps in the market and went for the opportunity. “He was a doer and a go-getter and very skilled with relationships in context of boards, advisors and business partnerships,” says Future Group Founder Kishore Biyani. Milestone’s board included former Bank of Baroda chairman MD Mallya and VK Chopra of Life Insurance Corporation.

In time, Arya got his theme right with small-ticket deals, strong relationships and investments from Noel Tata and Kishore Biyani. Joint ventures also included tie-ups with Religare, IL&FS and UK-based Ecofirst. The fund which was on track for strong performance but unfortunately got thrown off course when Arya passed away, succumbing to injuries from a freak accident when a tree fell on him during the monsoons in 2011. Biyani says “I had met Ved around one week prior to the tragic event, and all I can say is that PE history would have been entirely different if he hadn’t left early.” 

Needless to say, the vacuum he left did create questions in the minds of stake-holders, and life for Milestone Capital changed forever. For her part, Arya's wife Rubi put on a brave face, met developers, held on to un-deployed capital of between ~8 billion and 10 billion and soldiered on, taking over as executive vice-chairperson. 

The company made modest-to above-average returns with an aggregate of 1.5 X on the vintage fund thereafter but the way she sees it is that, “We never lost partner money and returned what we didn’t invest.”

To her point, the market changed dramatically between 2013 and 2018 when foreign investors putting money in real estate was no longer a one-off but became a widespread trend. 

Does she feel that her husband would be satisfied about the way she ran the show. “I think he’s smiling and thinking that I've had a soft landing and that the reputation of the family, the fund and the company is intact and that I've learned a couple of things along the way,” she says. “I'm not sad because I don't see sense in running a business at a loss.”