UK-based Ocean Dial Asset Management, acquired by financial services firm Avendus Group last year, has launched a maiden public equity fund that aims to raise Rs 1,500 crore ($221 million).
The alternative investment fund has already received commitment of Rs 50 crore ($7.4 million) from anchor investors including family offices and high net-worth or very wealthy individuals.
“The open-end equity fund will look to invest in Nifty constituents and blue-chip companies. While the fund will provide easy entry and exit options to investors, it is prudent to stay invested for the long term (three to five years) to take advantage of market volatility,” said Ocean Dial’s chief executive Dhiren Mehta.
According to rules, the fund can accept an investment not less than Rs 1 crore and can have maximum 1,000 investors.
Ocean Dial’s new public markets fund joins a growing list of alternative investment funds looking to harness the boom in Indian equity markets.
For example, Old Bridge Capital Management, founded by former IDFC Asset Management Co. investment chief Kenneth Andrade, floated a public markets fund in December 2017.
In September last year, VCCircle reported how a growing number of very wealthy investors were investing in diverse funds focused on public markets.
IIFL Asset Management Ltd went into fundraising mode last year for a corpus to invest in companies looking to go public. Kotak Private Equity, an arm of India’s fourth-largest private lender Kotak Mahindra Bank, had launched a new fund in October 2016 to invest in listed equities.
In February 2018, panellists at the ninth edition of News Corp VCCirlce’s Limited Partners Summit had said that the size of India’s alternative investment funds’ industry is set to more than double over the next two to three years, thanks in part to favourable policies.
In fact, when Avendus Capital acquired UK-based asset manager Ocean Dial in August, Avendus’s co-founder Ranu Vohra pointed out how the deepening of public markets was leading to a switch in fund flow from mutual funds to alternative investment funds.
Avendus, after acquisition by private equity major Kohlberg Kravis Roberts & Co. Ltd (KKR) in November 2015, has been transforming from a pure-play investment bank to a fully-fledged financial services company by offering products in niche areas—alternative asset management and structured credit solutions.
KKR—which manages multiple alternative asset classes, including private equity—in November 2015 agreed to invest in Avendus for a 70% stake through a combination of new shares and a sale of stock by existing investors. KKR purchased shares from Eastgate Capital and Americorp Ventures, an early investor in Avendus. The two investors together held around 41% stake in Avendus.