EAAA Alternatives, the alternative asset management arm of Mumbai-based Edelweiss Group, has returned the entire drawn capital from its third performing credit fund to its limited partners (LPs), marking a key milestone in the fund’s lifecycle.
The Edelweiss Special Opportunities Fund III (ESOF III) deployed Rs 7,250 crore and made 17 investments. The milestone comes after the fund exited a Rs 950-crore ($98.2 million) investment in a global agrochemical platform, it said on Thursday.
So far, ESOF III has realised Rs 8,700 crore through exits from 15 investments while continuing to hold the remaining two. Those investments are performing in line with expectations and are on track for exit, it added.
“Our private credit funds have consistently delivered attractive risk-adjusted returns and strong cash yields for investors across three fund vintages,” Amit Agarwal, chief executive of EAAA Alternatives, said in the statement.
“The ESOF strategy has established a track record through multiple credit and business cycles over the past 15 years. Returning 100% of drawn investor capital in ESOF III before the realisation of the fund’s remaining investments is a noteworthy milestone and underscores our focus on capital preservation, rigorous underwriting, and active portfolio management,” he added.
ESOF III, which achieved its final close in 2020 after raising about $900 million (Rs 6,600 crore then), was the firm’s largest performing credit fund at the time.
Edelweiss Alternatives had earlier raised Rs 1,000 crore for its first structured credit fund in 2010 and Rs 2,000 crore for its second vehicle between 2015 and 2017.
Building on that strategy, the firm launched ESOF IV in December last year, targeting a corpus of Rs 13,500 crore ($1.5 billion). It is currently deploying capital into high-quality corporates across sectors through customised financing solutions.
ESOF III received commitments from LPs including Ontario Teachers’ Pension Plan Board (OTPP), Florida’s State Board of Administration and Swedish pension fund AP4. Other investors included a European insurance firm and an Australian pension fund.
Through its performing credit strategy, EAAA provides financing for acquisitions, growth capital, refinancing, stake consolidation and other strategic requirements, targeting gross rupee returns of 16-18%.
EAAA India Alternatives manages assets worth around Rs 72,706 crore across its private credit and real estate strategies. It has a team of around 80 investment professionals serving more than 5,900 clients.
Its private credit business offers structured financing to corporates, projects and sponsors with limited access to conventional sources of capital. Its offerings span performing credit for growth capital, mergers and acquisitions, and promoter stake enhancement; investment-grade credit through bespoke financing solutions for operating companies; special situations financing, including stressed loan buyouts and high-yield senior debt; and real estate credit for mid-income and affordable housing projects.