Edelweiss raises Rs 6,600 cr AIF, plans to raise USD 1 billion fund

Group chairman Rashesh Shah claimed its $890 million is the largest fund raise this year by any entity in India amid the severe economic impact of the pandemic, and will be deployed into projects

Mumbai: Edelweiss Group on Monday said its asset management arm has raised Rs 6,600 crore from global long term investors for on-lending to Indian companies and projects requiring long term capital. The arm is looking to raise an alternative investment fund (AIF) of over $1 billion next year to invest in realty assets.

Group chairman Rashesh Shah claimed its $890 million is the largest fund raise this year by any entity in India amid the severe economic impact of the pandemic, and will be deployed into projects and companies seeking long term funds which can’t be served by the banks or the NBFCs due to potential asset liability mismatches.

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Edelweiss Asset Management’s (EAM) president and head Hemant Daga said the platform is targeting the seven-year Edelweiss Special Opportunities Fund-III (ESOF) to deliver returns between 16-18 per cent per year, which is a notch higher than the two previous funds in the same series.

He said EAM, which manages over Rs 30,000 crore, has managed to get commitments from global long term investors like pension funds and insurance companies for the new fund. Shah explained that there are some concerns in the minds of investors from a short term of up to one year, but they’re very bullish on the long term in the country.

Daga said this will be a sector-agnostic fund and EAM will target to commit up to 35 per cent of the $890 million in the next 12 months. He said the mandate of the fund is to provide flexible growth capital for mid-market companies which may include giving funds for acquisitions and stake enhancements as well.

EAM will focus on governance, cash flows, counterparty risks and collateral while lending the money, he said, adding that any company or project meeting the expectations on the above can get the debt. The overall need for funds in the market in which ESOF-III will be operating was pegged at over Rs 40,000 crore by Daga.