Financial services firm Edelweiss Financial Services Ltd’s alternative asset arm Edelweiss Alternative Asset Advisors (EAAA) has announced fundraising of around $425 million (Rs 3,400 crore) in its third Special Situations Fund (ISAF III).
“It (fund) has got commitments from leading institutional global investors, which include large insurance companies and pension funds as well as HNIs (high networth individuals) and family offices from India. The fund is targeting to raise $1 billion with a green shoe option of $500 million, Edelweiss said in a statement.
The company had earlier aimed to raise a corpus of $1.5 billion for the fund, as reported by VCCircle last year.
ISAF III has raised Rs 3,400 crore ($425 million) and invested more than Rs 1,000 crore in a short period of time in two bespoke special situation opportunities. Edelweiss believes it has a strong pipeline of opportunities in this space.
In January 2019, the company had closed Special Situations strategy Fund (Series II), which had seen the largest fund raise in alternatives in India in 2018, at $1.3 billion, with Canadian pension fund CDPQ as one of the key investors.
“Series II, apart from investing over Rs 10,500 crore across deals, has also exited several transactions and realized more than Rs 9,500 crore from portfolio companies. The Special Situations strategy focuses on asset heavy companies and identifies viable underlying businesses that EAAA believes, have a strong turnaround potential and/or invest in situations where resolution of asset requires capital and domain expertise," the statement said.
Amit Agarwal, head, Special Situations Strategy at the firm said, “The fund strategy caters to both corporates looking for specialized financing solutions to turn around their business fortunes as well as financial institutions looking to sell/resolve their existing portfolio assets. Acquisition financing under bankruptcy process is also emerging as a good opportunity set. We believe that the investors in special situation strategy can generate high returns, akin to equity, while mitigating downside risk as large part of fund investments that are made in the nature of covenant-heavy credit instruments.”
Edelweiss Alternative Asset Advisors pioneered private debt in India with launch of the $230 million (Rs 1,000 crore) fund in 2010. Over a decade, it has built one of the largest alternatives platforms in India with an AUM (assets under management) of around $5 billion (Rs 40,000 crore).
The special situations funds are focused on providing high quality credit and yield opportunities to global and domestic professional investors across performing credit (corporate and real estate), special situations and infrastructure yield, its clientele comprises of Indian and global institutional investors – pension funds, insurance companies, large family offices and ultra-HNIs.
Venkat Ramaswamy, vice chairman, Edelweiss Group said, “The high yield/special situations market in India continues to grow rapidly as requirement of flexible and patient capital is felt across industry segments.”
