Edelweiss’s Indian infra fund nears first close ahead of target

The $1bn vehicle is aiming for returns of up to 21% by investing in the country's operating roads, renewables and transmission sectors.

The maiden infrastructure fund of India’s Edelweiss Alternative Asset Advisors is heading for a first close on between $250 million and $300 million by the end of this month – ahead of its original end-of-quarter target.

The fund – which is understood to have secured $75 million of commitments in January – is targeting around 20 billion rupees ($311 million; €254 million), with a greenshoe option of 45 billion rupees.

The Edelweiss Infrastructure Yield Plus Fund was launched last December as an unlisted vehicle to capitalise on Indian infrastructure opportunities. It has garnered support from domestic institutions, family offices and select high-net-worth individuals, in addition to offshore institutions. Edelweiss expects offshore investors to contribute about half of the fund’s capital, according to Subahoo Chordia, who leads the fund.

The vehicle is aiming for an 18 percent to 21 percent IRR in rupees, added Chordia, and will start investing in projects after reaching a first close.

The fund invests in operating infrastructure assets with a focus on sectors such as roads, renewables and transmission. It will buy operating assets primarily from mid-sized developers with an average ticket size of between $30 million and $50 million. The manager is pursuing an asset aggregation strategy and will consider listing the assets under India’s infrastructure investment trust structure or a strategic sale to other larger investors, when it is time to exit.

Edelweiss manages around $15 billion in assets and invests across equities, fixed income and alternatives.