Blackstone -backed ASK Group has forayed into hedge fund business, private credit and currently looking to raise a new fund in real estate. Sunil Rohokale, MD and CEO, talks to Raghavendra Kamath about the group’s different ventures. Excerpts.
What is the status of your hedge fund business?
We launched the hedge fund in February and plan to close the fund of Rs 2,000 crore by FY25. It is an absolute return fund with debt-plus-returns strategy, 13-14% returns per year. As and when Blackstone enters the hedge fund business in India, they will look at us to scale up. ASK Hedge Solutions will launch an index-plus strategy with the current absolute returns strategy in the second half of the year.
You are looking to buy a mutual fund business. What is the rationale?
ASK wants to acquire an equity-focused mutual fund business to diversify the current investments of portfolio management services, alternative investment fund and advisory. We are looking at established fund houses with AUM of Rs 50,000-100,000 crore. Mutual funds give flexibility to active and passive diversification. It also help diversify customer segments and channels of distribution with different asset classes.
Are you looking to enter any new segment?
There are 400 portfolio managers in the country. We are exploring the possibility of strategic partnerships or acquiring one of these with assets of Rs 5,000-10,000 crore which add a style differentiator to ASK’s offerings. Such acquisitions will complement our business and can grow by tapping the Blackstone and ASK network.
How is your international fundraising faring?
Blackstone is helping us in international fund raising. ASK has capabilities in credit, real estate and hedge funds. This year we will see meaningful international fundraising from family offices and reciprocation by institutional investors. We have seen substantial traction to our newly launched UCITs (undertakings for collective investment in transferable securities) at Dublin, with AUM now crossing $100 million . European investors are actively looking to invest into India .
What is the status of your private credit fund?
We want to raise Rs 1,000 crore domestically and are in the process of doing first close before June … It’s mid-market performing credit… We are looking at `75-150 crore deal sizes. The fund would avoid investments in infra and capital intensive sectors. We will look at cash flow-generating businesses that require money for growth.
And the real estate fund?
We have almost deployed our fund raised last year .We are super excited on the opportunities in residential real estate. We have launched our Rs 1,500 crore realty fund. Within one quarter we will announce the first close. Axis Burgundy, Julius Baer , Nuvama Wealth , ASK Wealth are distributing it. This fund is focused on the top six cities. The fund is focusing on recapitalising /working capital and growth opportunities to ensure cash flows are available for distribution from the first year. This is fully secured SPV level debt investment.
How long do you think the boom in residential real estate will last?
Residential real estate is driven by demand and supply. Currently , the supply in most cities is less than 12 months’ demand, and hence we see higher sales velocity and increase in property prices . The economy is likely to grow this year by 6-7 % and interest rates could be cut later this year. Both factors will encourage robust demand.
With the stock markets booming, do you expect good demand for private credit this year?
We have seen government capex making wonders in the last few years and now we should expect the private capex journey. This will be the biggest opportunity for private credit funds as banks still shy away from corporate credit … The flexibility and speed of decision making makes the case for private credit funds.
