Investment management company, Estee Advisors Pvt. Ltd has launched a category-III alternative investment fund (AIF) with a corpus of Rs 200 crore to invest in the equity markets, the firm announced on Wednesday.
The Enhanced Alpha Fund aims to raise the amount mentioned above by end of the current financial year end.
The fund will allocate around 70% towards long-only equities with the rest 30% being assigned to a market-neutral strategy, according to a statement.
The firm claims that the AIF route has more potential for long-term stable returns than the other investments because of the flexibility it provides to the fund manager to use derivatives.
“With the launch of AIF, we move a step closer to offering investment solutions to all categories of investors. The key differentiator in all these products is the quant-driven approach, in which we are the market leaders," said Sandeep Tyagi, founder and chief executive officer, Estee Advisors.
The firm said its long-only portfolio (Long Alpha) will target excess return over the Indian benchmark Nifty 50 index, participating in the upside bull run. At the same time, the market-neutral portfolio will seek to generate an absolute return regardless of the direction of the market so as to provide a boost to the returns in an upmarket and a hedge in a downmarket scenario.
Estee was founded by Sandeep Tyagi, Prior to launching Estee, Tyagi was part of analytics firm, Inductis (now EXL Analytics) which built analytical solutions for companies like Merrill Lynch, American Express, Citibank and others. He is an alumnus of IIT Delhi and Columbia University.