Edelweiss Alternative Asset Advisors, the alternative investment unit of Edelweiss Financial Services, said Tuesday it has raised $425 million (Rs 3,400 crore) under its third special situations or special sits fund as it continues the fundraising exercise to garner a bigger corpus.
It has got commitments from leading institutional global investors, which include large insurance companies and pension funds as well as HNIs and family offices from India. It has already invested more than Rs 1,000 crore or close to a third of the corpus in a short period of time in two bespoke special situation opportunities, the firm said.
The third Special Situation Fund named ISAF III is targeting a $1 billion raise with additional green shoe option of $500 million that could take the total corpus to $1.5 billion (over Rs 12,000 crore).
Under this strategy, the firm has invested more than Rs 10,500 crore over the last four years and has realised cash of more than Rs 9,500 crore till date from its portfolio investments.
Edelweiss had raised Rs 1,000 crore ($230 million then) in its first stressed assets fund in 2010-11. Four years back it raised a record corpus topping Rs 9,000 crore mark under its second fund in the series.
The firm said that the second fund in the series is on track to successfully deliver superior risk adjusted returns to its investors. This fund had invested over Rs 10,500 crore across deals, including money recycled from previous exits, and exited several transactions and realising more than Rs 9,500 crore in the process, outside of existing portfolio companies.
The special situations investment strategy focusses on asset heavy companies and identifies viable underlying businesses that the company believes, have a strong turnaround potential and invests in situations where resolution of asset requires capital and domain expertise.
Amit Agarwal, Head, Special Situations Strategy at Edelweiss, said, “Special situation opportunities provide an exciting avenue for generating superior risk adjusted returns for investors. The Fund strategy caters to both corporates looking for specialized financing solutions to turnaround their business fortunes as well as financial institutions looking to sell / resolve their existing portfolio assets.”
He added that acquisition financing under bankruptcy process is also emerging as a good opportunity set. “We believe that the Investors in special situation strategy can generate high returns, akin to equity, while mitigating downside risk as large part of fund investments that are made in the nature of covenant-heavy credit instruments,” according to Agarwal.
Edelweiss’ alternatives business comprises credit and yield opportunities to global and domestic professional investors across performing credit (corporate and real estate), special situations and infrastructure yield.