Millennium Spire India Management, a real estate focussed fund, may find it a tad easier to raise its second fund of about $400 million even in such challenging times. This is because the firm has managed to attract capital from a group of miffed investors, who are shifting their portfolio from existing funds due to mismanagement issues. Millennium Spire hopes to achieve a first close by end-December.
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Talking to VCCircle, Millennium Spire India Managament managing director Ashish Bhalla said, “a lot of investors are shifting their assets to us as they are moving away from the funds that are operating in India right now. They are giving us their portfolios to manage.”
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Bhalla declined to spell out the names of these funds, which are witnessing a flight of investors, and also the quantum of capital that Millennium Spire stands to gain. He, however, said, such investors’ allocations to the $400-million fund are “significant.” Millennium Spire has managed to win the faith of investors thanks to robust valuations and excellent track record of projects, he added.
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Millennium Spire India Management has fully committed its first fund of $60 million with investments in projects in Coimbatore and NCR region. The fund, housed in Singapore, is stretching its asset base and has also entered China.
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Predicting the future course of Indian realty, Bhalla said, affordable housing will be the central theme going forward. “Indian real estate will see a second phase of development. The last five years saw a lot of money being wasted in projects that have not been good from an end user perspective,” he reckons.
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On the realty market, he said, while there is some pickup, the commercial (office space) segment continues to be under pressure. “I don’t think anybody sees it rebounding in near future to the levels that it was at,” he said, adding, realty prices may not go up in the near future.
