Edelweiss Alternative Asset Advisors Ltd said on Tuesday it has floated a fund to raise as much as Rs 2,000 crore ($300 million) to invest in stressed assets.
The target corpus of the EISAF II Onshore Fund includes Rs 1,000 crore via a green-shoe option, the company said in a statement.
The fund’s investment mandate is centered on the acquisition of non-performing debt from banks or financial institutions, funding companies for debt settlement, working capital financing and acquisition of stressed companies undergoing insolvency proceedings at the National Company Law Tribunal (NCLT).
“This has created an interesting opportunity for investors to participate in (a) market-neutral strategy, which offers equity-like upside with a lot of protection on the downside. This fits very well in most portfolios of sophisticated investors and family offices,” said Nitin Jain, CEO of global wealth and asset management at Edelweiss Group.
Jain said the firm has already raised more than Rs 6,000 crore for the stressed assets strategy and has also created “a separate slice” for some of its wealth clients to access this opportunity.
Edelweiss already has a partnership with Canadian pension fund CDPQ for the stressed assets business. CDPQ had, in October 2016, agreed to invest $750 million in Indian stressed assets alongside Edelweiss. This investment included taking a 20% stake in Edelweiss Asset Reconstruction Company.
In January this year, Jain had told VCCircle that the firm was working towards mopping up around $600 million to $800 million in 2018 for its stressed assets fund. The pool of available capital would, however, be higher because of co-investments.