Edelweiss Financial Services Ltd is aiming to raise up to $1 billion for its structured credit-focussed Edelweiss Special Opportunities Fund III, a top executive has said.
Hemant Daga, president and deputy chief executive officer of Edelweiss Global Asset and Wealth Management, told Mint that the fund expects to hit the first close in the July-September quarter. It will look to invest in holding companies or operating firms that are seeking growth.
The target corpus is nearly triple the sum of $350 million that Edelweiss had raised in April 2017 for ESOF II. Its first credit fund, ESOF I, had pooled together $230 million.
The development comes two months after the Mumbai-based diversified financial services group said it had raised $1.3 billion for its distressed assets-focussed fund.
“Like in our distressed fund, investors will be largely offshore institutions such as pension funds, insurance companies, and endowments,” Daga was quoted as saying. “We will also have a sleeve for our ultra-high net worth investors and select family offices.”
Daga pointed out that there was a huge opportunity for alternative investment funds (AIFs) in the aftermath of the recent liquidity crunch in the shadow banking sector triggered by the crisis at Infrastructure Leasing and Financial Services Ltd (IL&FS).
Daga was further quoted as saying that credit spreads had widened in the aftermath of the squeeze and Edelweiss felt it was a suitable time to launch the third installment of its special opportunities fund as returns adjusted for risks had become attractive.
He added that the long-term nature of AIFs trumped the short-term borrowings offered by lenders.
VCCircle has reached out to Daga for further details about ESOF III. The article will be updated if and when a response is received.
Edelweiss has fully exited its first credit-focussed fund and has deployed around 65% of the second installment.
The Edelweiss Group has raised several funds, including pre-IPO fund Edelweiss Crossover Opportunities Fund, Edelweiss Real Estate Opportunities Fund and a $1 billion infrastructure fund.
Other funds that Edelweiss manages include Edelweiss Stressed and Troubled Assets Revival Fund and Edelweiss Asset Reconstruction Fund-I.