Avendus to raise Rs 3,000 crore via AIFs

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MUMBAI: Avendus Capital is raising Rs 3,000 crore to expand its kitty on alternative investments, with the financial services firm targeting family offices, high net worth individuals and corporate treasuries to sell its products.

While the company, backed by private equity firm KKR, is ramping up collections in a newly launched scheme to bet on Indian equities, it is also reopening an earlier fund, named Absolute Return Fund.

Under Absolute Return Fund, it had mopped up about Rs 3,300 crore last year. It is now opening a window with a plan to raise another Rs 1,000 crore.

The other fund, Enhanced Return Fund, was launched during November-December and has already collected Rs 1,000 crore. Avendus aims to raise another Rs 2,000 crore through the fund.

“Alternative investment funds are fast gaining popularity in India as investors see little upside in other asset classes including direct equity,” said Andrew Holland, the Avendus Capital chief executive who manages these two funds. “If tax laws are set to a level playing ground, the AIF industry has huge potential to grow in India.”

“Some corporate treasuries, family offices and wealthy investors have already evinced interest on these products,” he said.

Avendus would close subscriptions to these funds this calendar year itself. The average return on investment is expected to be in the range of 9-11%, adjusted for tax.

Avendus Absolute Return Fund invests in India-listed equities and equity derivatives aiming to produce absolute returns mitigated volatility compared to the overall stock market <>.

It seeks appreciation through a risk-adjusted manner, as the fund manager takes bets both through long and short positions in equities, futures and options depending on market conditions.

The objective of the Enhanced Return Fund is to generate superior returns to the Nifty 50 index while limiting the downside, by maintaining a mix of long only portfolios (about 70 per cent of the fund) and long short (about 30 per cent of the fund).

Source: Economic Times