Edelweiss Alternative Asset Advisors Announces Final Close Of $900 Mn AIF

Edelweiss Alternative Asset Advisors (EAAA), an asset management platform with assets worth INR 75,000 Cr under management, on Monday (October 19), announced the final close of its $900 Mn (INR 6,600 Cr) alternative investment fund ESOF III, third in the Edelweiss Special Opportunities Fund (ESOF) series. The first two funds in the ESOF series were launched in 2010 and 2015 respectively. EAAA 

The asset management platform, which is a part of Edelweiss Asset Management (EAM), through ESOF III, will look to provide structured credit to Indian companies and has received commitments from marquee foreign institutional investors — Ontario Teachers’ Pension Plan Board (OTPP), Florida’s State Board of Administration, Swedish Pension Fund AP4 and a European insurance investor. EAAA also has other investment funds, such as the Edelweiss India Stressed Asset Fund, launched last year, and Edelweiss Infrastructure Yield Plus, launched in 2018. 

“Banks and Mutual Funds have been receding from the structured credit space in line with global trends and the current dislocation has further accentuated the need for long-term flexible capital,” said Rashesh Shah, chairman and CEO Edelweiss Group. 

“This presents a huge opportunity for private debt players and it’s reassuring to note that the present market environment has not deterred investors who are keen to participate in India’s long-term growth story.”

While the harsh market environment this year, amid the financial disruption caused by the Covid-19 pandemic, saw the Indian economy contract by 24% in the June quarter of the financial year (FY) 2020 and several Indian companies announce layoffs, furloughs and pay cuts for their employees, there seems to have been a positive sentiment amongst investors in the Indian startup economy July onwards. 

According to an Inc42 Plus analysis, between January to September 2020, so far $8.1 Bn has been invested into Indian startups across 652 funding deals. Of the total funding amount, 51% or $4.1 Bn was invested in startups in the first quarter (Q1) of 2020 across 208 deals. Thereon, the funding amount fell drastically, by more than 74% to $1.05 Bn across 179 deals in Q2 2020. The numbers for Q3 2020 have recovered from the previous quarter, with the funding amount increasing by 167% to $2.8 Bn and the deal count increasing by 46% to 261 deals.

Hemant Daga, CEO of EAM claims that the fundraise for ESOF III, amid a subdued economic climate, is a strong endorsement of the opportunities in the Indian alternative asset management space.