Edelweiss Alternative Asset Advisors Ltd, a unit of Edelweiss Financial Services Ltd, will acquire the investment managers of two funds launched by homegrown real estate-focussed private equity firm Milestone Capital Advisors Ltd.
The Milestone Opportunities Fund 10 and Milestone Commercial Advantage Fund have total assets under management of Rs 150 crore, Edelweiss Financial said in a stock-exchange filing. The transaction is subject to requisite regulatory approvals.
Edelweiss said that the acquisition of Milestone’s commercial real estate fund will mark its foray into the segment.
“There is a growing demand from investors for high-yielding long term assets and we believe this is a large structural opportunity,” said Nitin Jain, chief executive officer, global wealth & asset management business, at Edelweiss.
Edelweiss is also absorbing the investment team of these funds. According to Milestone’s website, its core investment team includes Nilesh Karkhanis – partner, real estate investments, Sachin Sahasrabudhe – head, property and asset management, and Sharat Singhee – vice-president of real estate investments.
The development comes following a spate of top-level exits at Milestone over the past couple of years. Sandeep Chadha, who headed Milestone’s commercial real estate operations, quit in November last year.
Nitin Goel, who was part of the residential real estate team at Milestone, had resigned a few years ago to join Edelweiss. He is now part of the same unit which will acquire Milestone’s funds. His exact role in the deal is unclear.
Edelweiss Group currently manages customer assets worth more than $26 billion, of which Edelweiss Alternative Asset Advisors, one of India’s largest alternative asset management platforms, has over $2 billion in assets under management.
In the realty space, it currently manages a Rs 500-crore residential real estate-focused fund.
“Over the last 8-10 months, the industry has witnessed a spate of transactions clearly indicating a turnaround in the commercial real estate space,” said Venkat Ramaswamy, executive director & co-head, global wealth & asset management business at Edelweiss. “This acquisition will allow us to partner with global institutions looking at India as a long term investment destination.”
Earlier this year, VCCircle chronicled how Mumbai-based Milestone had endured a rough patch since the sudden demise of its founder, Ved Prakash Arya.
Between its inception in 2007 and Arya’s death in 2011, Milestone had mopped up Rs 4,000 crore across nine funds.
The firm launched two funds since Arya’s death – both of which will now be sold to Edelweiss – but could not repeat its earlier successes.
Milestone had launched a Rs 500-crore residential fund back in 2014 but was only able to scoop up around a third of that amount.
The firm launched a commercial realty fund a year and half later and it met with a similar fate, only managing to garner Rs 200 crore out of a target of Rs 1,400 crore.
To add to its struggles on the fundraising front, there were a slew of senior-level exits between 2014 and 2016, leaving Milestone to manage its assets and funds with only a handful of resources.
The management had evaluated deals to sell the firm but nothing had fructified following mismatches in valuation.
Arya had told VCCircle earlier this year that Milestone was evaluating tying up with partners on products centred around logistics, commercial & affordable housing assets.