Edelweiss on Thursday announced the closure of its second alternatives fund EISAF-II worth $1.3 billion and indicated that the firm has already deployed 50% of the fund and expects to complete the remaining deployment in the next 18-20 months.
The fund received investments from large insurance companies, pension funds, high net-worth individuals (HNIs) and family offices in India and overseas.
Rashesh Shah, chairman and CEO, Edelweiss Group, told reporters during a press conference that almost $300 million of the $1.3 billion has come from Edelweiss group itself. “Of the remaining $1 billion, almost 90% of the investment has come from overseas investors while 10% has come from domestic investors,” he said.
Edelweiss Alternative Asset Advisors (EAAA), the alternative investment arm of Edelweiss Group, caters to global and domestic investors across structured credit, infrastructure yield, real estate and distressed credit. According to Edelweiss, EAAA acts as manager/advisor for over $ 3 billion from marquee global limited partners (LPs) and HNIs /family offices in India.
The firm pointed out that the investment mandate of EISAF-II is centered around making value investment in stressed assets with an aim to turn around viable non-performing assets. The fund is focused on assets with established infrastructure, viable business models and potential of generating cash flows.
The management further elaborated that of the group’s commitment worth $300 million to the fund, a considerable quantum will come from Edelweiss Asset Reconstruction Company (ARC) while the rest should come from other entities within the group.
Although the management did not pin-point the expected rate of return on the fund, Shah said that as fund managers, they expect it to be in the range of 15-18% gross return. “We target what is called the rupee gross return. Investors make their own adjustments — they hedge their positions, exchange returns, etc,” Shah said.
The first fund under the EISAF series, the EISAF-I fund which was raised a few years ago, had a size of $77 million. Venkat Ramaswamy, executive director at Edelweiss Financial Services said the fund has not fully exited its investments.
Talking about the possibility of the launch of a next fund in the EISAF series, Ramaswamy stated it is unlikely to happen in 2019.