Edelweiss hits $297m first close for maiden Indian infra fund

The fund manager plans to raise a further $700m in the next 12 months to reach its $1bn target.

Edelweiss Alternative Asset Advisors, the alternative asset management arm of Indian financial group Edelweiss, has met its self-imposed deadline of raising between $200 million and $350 million in the first quarter for its maiden infrastructure fund.

Earlier this week, the Indian firm announced it had raised 20 billion rupees ($297.3 million; €249.8 million) for its Edelweiss Infrastructure Yield Plus Fund, reaching first close on a vehicle the firm officially launched in January.

The firm will continue fundraising activities for a further 45 billion rupees, or around $700 million, via a green shoe option over the next 12 months, the firm said in a statement.

“The funds raised so far are largely from domestic investors including institutions, family offices and high-net worth individuals with about 25 investors contributing almost 70 percent of capital raised so far,” Subahoo Chordia, the fund’s manager, told Infrastructure Investor. “We have also received commitments from a few foreign investors,” he added but declined to name the LPs.

“Over the past couple of years, we have seen a huge uptick in the demand for products offering higher risk-adjusted yield from our investors, and the fund aims to cater to this specific need,” said Nitin Jain, chief executive of global wealth and asset management at Edelweiss Financial Services. The company has been active in India’s private debt market and decided to expand its alternative offerings by proposing the launch of the infrastructure fund late last year.

Jain tells us why Indian infrastructure offers superior risk-adjusted returns compared with other asset classes, but also the challenges it faces

The India-focused infrastructure fund, which is rupee-denominated, has a target IRR range of between 18 and 21 percent. It targets operating assets in the transport, renewables and transmission sectors, which are monetised by infrastructure developers and contractors as they seek to recycle capital, reduce debt and fund future growth. The average ticket size of each investment ranges from $30 million to $50 million.

The fund has already started looking at and assessing opportunities, according to Chordia. “We have got a good healthy pipeline and sourced over $10 billion of possible opportunities on an estimated total asset value basis,” he said. “We have shortlisted $3 billion out of the same. We have signed a term sheet and are currently doing detailed due diligence on five assets with a potential asset value of over $1 billion,” he added.

Edelweiss Alternative Asset Advisors currently runs seven funds across illiquid strategies in India including infrastructure, distressed assets, collateralised credit and real estate. It said its parent group has around 1,630 billion rupees of assets under management.