Mumbai-based Milestone Capital Advisors, is readying Rs.500 crore realty debt fund (with an option for additional Rs.200 crore) that will lend to developers of mid-segment residential projects in five cities across the country.
Five cities Milestone Opportunities Fund 10, a close-ended residential realty fund, will invest in mid-segment housing projects across five cities — Chennai, Mumbai, Bangalore, Pune and New Delhi — that the company believes are the most attractive markets for residential segment in the country. The Fund will come in at a stage when all approvals are in place and cash flows should have started in residential projects.
“We hope to have a fund size of about Rs.200 crore by the end this month and are confident of raising the total corpus at the earliest,” said Rubi Arya, Vice Chairman and Director of Milestone Capital Advisors. The new Fund will seek to lend in the range of Rs.60-80 crore per project and about 30 per cent of the funds is expected to be committed for projects in Chennai. Milestone has already identified some projects in Chennai that could be executed within a short timeframe.
This Rs.500 crore Fund aims to deliver a gross IRR (internal rate of return) of 24 per cent. It will have a tenure of 3.5 years with a provision for one more year extension and is being mobilised from financial institutions, corporates, high networth individuals and trusts.
Milestone is an Indian PE fund that manages eight funds in realty segment with Rs.2,876 crore deployed across projects.
It claimed to have returned Rs.1,650 crore, about 57 per cent, by way of capital and income to its investors in its realty funds so far.
