Edelweiss Group fund raises ₹6,600 crore

At a time when Covid-19 pandemic has managed to dent corporate growth plans and have become an existential crisis for some companies, there is all but gloom in the market. One of the only companies that seem to buck the trend is Edelweiss Alternative Asset Advisors (EAAA), part of Edelweiss group’s Edelweiss Asset Management (EAM). EAM is one of India’s leading asset management platforms, with assets under management (AUM) of around ₹75,000 crore. Its subsidiary, EAAA, has shimmered with a ray of hope in an otherwise subdued environment.

On October 19, EAAA announced the final close of its alternative investment fund—called the ESOF III, the third in its Special Opportunities Series—amounting to around $900 million, or ₹6,600 crore. This fund raise, according to EAAA, is a strong endorsement of the opportunities in the Indian alternative asset management space, as well as a testimony to EAM's robust and unique private debt platform.

ESOF III was launched with an investment mandate centering around the performing credit space, with a focus on providing structured credit to Indian companies. In a statement, EAAA said that the fund’s strategy has generated strong investor interest, and has received commitments from marquee global institutional investors, which include recent investments made by the Canadian Ontario Teachers’ Pension Plan Board, Florida’s State Board of Administration, Swedish Pension Fund - AP4, and a European insurance investor, among others.

Edelweiss group’s chairman and CEO, Rashesh Shah said that the overwhelming response received for ESOF III is testament to India’s growth potential and investors’ strong confidence in Edelweiss' private debt platform.

“Banks and mutual funds have been receding from the structured credit space, in line with global trends, and the current dislocation has further accentuated the need for long-term flexible capital,” said Shah. He further added that the present series of investments show that a huge opportunity for private players exists, and that the challenging market environment at present has not deterred investors from participating.

Hemant Daga, CEO, Edelweiss Asset Management, said that having built deep expertise in the alternative asset management space, the latest fund raise is a strong validation of EAM’s capabilities to originate, underwrite, structure, and realize private credit strategies. Back in 2010, EAM pioneered private debt in India with the launch of its maiden $230 million, or ₹1,000 crore, ESOF I.

“We believe, close-ended asset management vehicles are the preferred option for long-term credit investments as they are unlevered, patient capital vehicles,” Daga said in the statement.

Over the decade, Edelweiss group has built the largest alternatives platform in the country with an AUM of around ₹30,000 crore, as well as India’s fastest growing mutual fund business with an AUM of ₹45,000 crore.

The alternatives platform is focused on providing high quality credit and yield opportunities to global and domestic investors across performing credit (corporate and real estate), distressed credit, and infrastructure yield. Earlier this year, EAM had announced the closure of its infrastructure yield fund— called EIYP. The closure raised around $450 million, or ₹3,300 crore.