Of the total investment, US-based Kora has committed $75 million in the group’s advisory business, Edelweiss Global Investment Advisors (EGIA), subject to structuring-related milestones and regulatory approvals, Edelweiss said in a statement on Wednesday.
Besides, Kora plans to invest an additional $50 million in Edelweiss, and is in the process of finalizing the timing and structuring of the deal.
Kora Management, a growth investor focused on niche financials and technology businesses across emerging markets, is already an investor in Edelweiss. “We look forward to deepening our long-standing relationship with Edelweiss,” said Nitin Saigal, Kora’s founder and chief investment officer.
“Over the years, the group has successfully built a diversified financial services franchise in India, with multiple scalable platforms. Today, EGIA is well positioned in asset and wealth management, and distressed debt, two very exciting sub-segments in Indian financial services, with the potential to grow multi-fold in the years to come. We work to be constructive partners to our portfolio companies and welcome the opportunity to partner with Edelweiss,” Saigal added.
EGIA includes the asset reconstruction, wealth and asset management and institutional client group businesses, together contributing nearly half of Edelweiss’ profits. With over ₹2 trillion in customer assets, the firm is one of the market leaders in each of its advisory businesses.
Kora Management’s proposed investment in Edelweiss Group’s advisory business marks the third and final external funding process for the group. “Kora Management is directly aligned with the strategic goals of the business, and we are very happy to strengthen our already long association. Our customers will benefit immensely from Kora’s acumen in technology and financial services across emerging markets, and their investment will help us scale our businesses in a competitive market environment,” said Rashesh Shah, chairman and CEO, Edelweiss Group.
Besides Kora, Mumbai-based Edelweiss is also in talks with other investors to join the first external investment round in EGIA, which will be limited to $200 million.
In 2017, Edelweiss Group decided to separate its credit, advisory and insurance businesses into three distinct entities, each with its own set of investors, a ring-fenced capital base, and an independent board. Its credit and life insurance businesses have already established long term partnerships.
Its life insurance business Edelweiss Tokio Life Insurance (ETLI) is a joint-venture partnership with Japanese insurer Tokio Marine, which holds 49% stake in the company through its investment arm Tokio Marine Holdings Inc.
The credit business of the group, ECL Finance Ltd., also got commitments of over ₹1,800 crore ($250 million) from Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), an existing investor in the Edelweiss Group. The strategic investment, made via CDPQ Private Equity Asia Pte Ltd, sought to capitalize on opportunities in the credit market.
Besides, Insurer Allianz AG, through its investment management arm Allianz Investment Management, also announced an investment of $200 million in the private debt platform of Edelweiss in February. The deal marked Allianz’s first investment in the private debt and distressed assets space in India. The Allianz investment was part of the $1.3 billion worth of commitments that Edelweiss had secured for its EISAF II fund.