April 2016

www.milestonecapital.in

Dear Friends and Associates

I warmly welcome you to the April 2016 issue of CONNECT, our quarterly corporate e-newsletter.

At Milestone, we have begun the year fairly well. As a brand, we have focused on consistency of returns to our investors, throughout our business cycle, and today it is an honour to be recognized amongst the best in the world when it comes to consistent performance. PREQIN, a global PE research & publication group has listed 3 of our funds (across structured debt & private REITs) amongst the top quartile of the most consistently performing real estate funds globally, an accolade truly reflecting our philosophy and values. Also, keeping in mind that the best corporate governance comes from a diligent

Evaluation (UK) in association with Hunt Partners, and our board has been rated very high on governance & management, thus qualifying it to steer Milestone towards the next stage of expansion & growth.

On the business front, I am proud to state that we have returned over Rs. 3,000 crores back to investors across our funds and with that milestone achieved, we would be amongst few in the country to have done so. On the residential side, our

fund, focused on mid-segment residential sector, has commenced investing into high-quality proprietary deals, few of

execution and delivery. 2016 is expected to gradually move towards better home sales and see a spurt in launches in some locations. The year will also see the sector moving from an investor-driven to an end-user driven cycle.

More platform & managed account transactions between Indian GPs having proven track record and investors are also expected to happen, further adding to the robust long term growth story of the sector. Another interesting observation has

looking to increase the equity portion in their new funds, thereby taking on more risk, albeit controlled to some extent

returns through long-term commitments.

improving rapidly. We feel that it is the right time invest into this sector and build the portfolio of rent yielding assets,

term appreciation along with healthy rental income. Recent trends in this space indicate opportunistic buying of distressed

We are fully committed towards our stakeholders and our practices and performance is backed by transparent and ethical procedures and systems. We look forward to your continued support and look to CONNECTing again soon.

Foreword Rubi AryaExecutive Vice Chairman

Business UpdatesBusiness Updates

Commercial fund IL&FS Milestone Fund II, has recently exited from E-City II, Bangalore for Rs. 150 crores, and the asset has fetched healthy returns in a very competitive market

investors as well due to its attractive risk-return potential. We have raised commitments towards our new fund MOF10 to the tune of Rs. 150 crores. We have been able to raise this amount from a combination of ultra HNI investors as well

We see a continued potential in the real estate market in India. On the residential front, the challenges of demand-supply mismatch and high unsold inventory across the country remain, but the signs are nevertheless

Residential property in India is expected to receive USD 4 bn investments this year

RESIDENTIAL REAL ESTATE

Rs. 150 crores, and the asset has fetched healthy returns in a very competitive market. Along with this exit, we have distributed over Rs. 3,000 crores to our investors so far, making us one of the few in the industry to have achieved this. In addition to this, we have further lined up exits of approximately Rs. 700 crores over the next 12 months.

We feel this is the right time to invest in commercial real estate as the assets are available at attractive valuations on the background of falling interest rate environment, which increases the appreciation potential for the investors.

Manufacturing, and Pharma. We are actively working on launching a New Commercial Fund focused on pre-leased commercial assets and have begun discussions prior to commercially presenting it to investors.

Right time to invest in commercial real estateCOMMERCIAL REAL ESTATE

RE-ESTABLISHING TRUST & DEPENDABILITYTHROUGH BOARD EVALUATION STUDY

We are among one of the few Indian corporates to have undertaken the Board Evaluation Study by Board Evaluation Ltd. UK & have been evaluated with very high scores, with the board re-establishing transparency, trust & dependability across all executive planning & decision making, thus having demonstrated the highest levels of corporate governance standards.

Board Evaluation Ltd, UK is an independent organization of highly experienced consultants focused on helping organizations, to assess Board

Business Updates

Milestone Fund Track Record

Milestone Opportunities Fund 10 (Investment Update)

57 REAL ESTATEINVESTMENTS 30 COMPLETE

EXITS 3000Cr.Rs.Raised & Distributed

Over

Note: IRRs for Offshore Funds are in INR terms

As on 31st March 2016

Number of investments 57 investments pan India.

Performance across funds 30 full exits across real estate funds 100% of all funds raised returned by way of capital & income

REAL ESTATE FUNDS 2,538BULLION PRODUCTS 330

EQUITY LINKED NOTES 400

*EDUCATION & HEALTHCARE FUND (DIVESTED) 433

TOTAL FUNDS RAISED BY MILESTONE 3,701

All figures shown in INR Rupees (Crores)

# Knight Frank valuation adjusted after capital distribution made post 31st March, 2015

FUNDS CLOSING NO. OF FUNDS RETURNED REALISED

VALUATION OF GROSS

RAISED INVESTMENTS (Capital + Income)

GROSS IRR

UNDIVESTED MoC (INR) CAPITAL# (INR)

TOTAL 3,701

DEVELOPMENT FUNDS

MILESTONE DOMESTIC FUND I & II 2 funds

617 Mar-08/

28 669 12% 136 1.3 Nov-08

PRIVATE REITs

IL&FS MILESTONE FUND I & II 2 funds 1,086 Mar-08/

12 1,381 15% 223 1.5 Mar-10

STRUCTURED DEBT

MILESTONE DOMESTIC FUND III 1 fund 394 Jan-12 10 296 24% 335 1.6 TOTAL DOMESTIC FUNDS 2,097 50 2,346 694

OFFSHORE FUNDS

IL&FS MILESTONE CORE PLUS RETAIL FUND LLC 1 fund 100 Dec-11 1 137 21% 9 1.5

MILESTONE FUND LLC 1 fund 341 Mar-09 5 85 14% 409 1.3

TOTAL OFFSHORE FUNDS 441 6 222 418

OTHER FUNDS

MILESTONE BULLION SCHEME - I 1 fund 330 Oct-10 389 6% FUND FULLY EXITED 1.2

TOTAL MILESTONE FUNDS 2,868 56 2,957 1,112

DIVESTED BUSINESSES 833

NAME OF FUND

Rajesh LifespacesProject by

Raj Tattva, Thane (W), Mumbai(Residential Apartments)

Approvals in place, work started, sales commenced

Rs.200 cr.Deal pipeline

4 ApprovedDeals

solicit any sale or enquiry. All figures pertaining to our funds are as per our latest quarterly e-newsletters and are updated as on the last day of the previous month. While we have made every attempt to ensure that the information contained herein has been obtained from reliable sources, we are not responsible for any errors or omissions, or for the results obtained from the use of this information. We specifically disclaim any and all liability for any claims or damages that may result from the information contained herein. Any queries pertaining to any information displayed herein should be mailed to info@milestonecapital.in

their website. Milestone is proud to announce that 3 of its funds (across structured debt, private REITs and real estate development) feature in the top quartile of all funds, in terms of consistent performance*. The same is on basis of realized gross IRRs measured against a global median benchmark IRR for similar funds/similar vintage. Only 2 Indian fund houses feature in the list and we are proud to be recognized alongside the best in the world.

professionals in over 90 countries for a range of activities including investor relations, fundraising and marketing, and market research. Preqin provides data and information on the private equity, real estate, hedge fund, infrastructure, private debt and natural resources asset classes, encompassing the following areas: Funds and fundraising, Performance, Fund managers, Institutional investors, Deals & Fund terms

Milestone Capital Advisors Limited

Maharashtra (INDIA) Tel: +91 22 6716 7000 | Fax: +91 22 6716 7077 | email: info@milestonecapital.in

Alongside the Best in the WorldAlongside the Best in the World

As on 30th April, 2016