Edelweiss Alternative Asset Advisors (EAAA) has raised $425 million (Rs 3,400 crore) in its third Special Situations Fund (ISAF III).

The fund has received the Crisil Fund Management Grading-1, denoting “very strong” standards in investment process and management practices. It has got commitments from leading institutional global investors, including large insurance companies and pension funds, as well as HNIs and family offices from India.

The fund is aiming to raise $1 billion, with a greenshoe option of $500 million. The Special Situations Strategy Fund (Series II) saw the largest fund raise in Alternatives in India in 2018.

Series II, apart from investing over Rs 10,500 crore across deals, has also exited several transactions and realised more than Rs 9,500 crore from portfolio companies.

The Special Situations Strategy focusses on asset heavy companies and identifies businesses that have a strong turnaround potential.

The Special Situation Fund (Series III) or ISAF III has raised Rs 3,400 crore ($425 million) and invested more than Rs 1,000 crore in two special situation opportunities. Edelweiss believes it has a strong pipeline of opportunities in this space.

Amit Agarwal, Head, Special Situations Strategy said, “Special situation opportunities provide risk adjusted returns for investors. The fund strategy caters to both corporates looking for specialised financing solutions to turnaround their business fortunes, as well as financial institutions looking to sell /resolve their existing portfolio assets. Acquisition financing under bankruptcy process is also emerging as a good opportunity set. We believe that investors in the special situation strategy can generate high returns, akin to equity, while mitigating downside risk as a large part of fund investments that are made in the nature of covenant-heavy credit instruments.”

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