Newly created private equity firm Quadria Capital has acquired Milestone Religare, an equal joint venture PE firm between financial services major Religare Enterprises and Mumbai-based Milestone Capital Advisors. The deal involves Quadria, which is raising an Asia-focused healthcare fund, buying the stake of both Milestone and Religare through cash and economic interest. Milestone Religare currently manages India Build-out Fund I, a Rs 420 crore rupee-denominated fund focused on healthcare and education sector.
The deal comes as Milestone Capital started exploring a sale process after its founder Ved Prakash Arya died in a freak accident in 2011.
The firm has been on the block for more than a year now and recently reached a deal to sell real estate fund management business to a clutch of high networth individuals (HNIs).
Milestone wanted to sell out and Religare also decided to sell its stake in the joint venture. “Both me and the (Milestone Religare) team, which stays the same, can now provide stability to the platform," said Quadria Capital's founder and managing partner Dr Amit Varma.
While the deal size was not disclosed, as part of the transaction Religare Enterprises will get an economic interest in Quadria Capital.
Under the deal, Milestone Religare team will now operate independently under Quadria and manage the India Build-out Fund I.
The deal will ensure continuity for limited partners and portfolio companies of Milestone Religare. A healthcare industry veteran, Dr Varma has been part of Milestone Religare team since inception four years ago and sits on board of its portfolio companies. As president of Religare's healthcare business, he has also represented Religare as part of Milestone Religare's board and investment committee.
Last year Dr Varma quit Religare to float Quadria Capital with Abrar Mir, founder of one of the largest Shari'a-compliant private equity funds in the Middle East NBD Sana Capital. Singapore-based Quadria is raising a $300 million fund, which will focus on healthcare investment in South and South-east Asia.
Dr Varma maintains that there will be no conflict between two platforms and both teams continue to operate independently.
Follow-on fund to be decided
Quadria has also not been decided if there will be follow-on India Buildout Fund. "We as a team need to sit together, look at our current portfolio and have a chat around how to take it forward," said Dr Varma.
He added that India Buildout Fund has exhausted most of its corpus and does not expect to make more investments.
Quadria also plans to reach out to limited partners of India Buildout Fund in the coming days. "Our intention is to go out to meet them one on one next week," said Dr Varma.
Milestone Religare's portfolio includes oncology chain Healthcare Global Enterprises (which recently saw investment by Temasek), Hyderabad's multispecialty hospital KIMS and test preparation firms IMS Learning and Resonance Eduventures. It has also invested in credit rating agency CARE Ratings, which was listed in December 2012.
The PE firm has made partial exits in CARE and Resonance already. Quadria expects first close soon.
Dr Varma also said that the first close for Quadria Capital Fund L.P. "is imminent", with the fund hoping to raise over $100 million.
Quadria Capital Fund is raising offshore capital and is looking to invest in areas like healthcare delivery, life sciences, medical technology and associated healthcare services.
While the fund has closed any deals yet, it has a good pipeline of deals going ahead, said Dr Varma.
(Edited by Prem Udayabhanu)