Edelweiss Wealth Management aims to raise USD 1 bn in late-stage, pre-IPO PE fund

Edelweiss Wealth Management on Thursday said it is targeting to raise USD 1 billion through a pre-IPO and late-stage private equity fund. The city-based company, which launched the ‘Edelweiss Crossover Opportunities Fund’ in March this year, has already raised USD 500 million across its first three series, it said in a statement. It announced the launch of ‘Series IIIA’ with a target to raise another USD 200 million under the same strategy, it said.

The announcement comes amid a big surge in initial public offers due to easy liquidity and many of the issues have seen huge gains on listing. Edelweiss said its ‘crossover’ strategy will continue with the launch of a series of funds over the next 12-18 months to achieve the target of USD 1 billion. The private market has largely been inaccessible to many of our Indian HNI (high net individuals) and family office customers who are looking to invest in fundamentally strong companies with proven business models.

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“At the same time, many of these companies preparing to go public need to raise funds to deleverage their balance sheet or make up for PE investor exits. Crossover as a strategy aims to bridge this gap, its president and head of investment management Anshu Kapoor said. The fund provides quality Indian capital to fund home-grown companies with extensive domestic and global ambitions on their way to IPO, he said, adding that from an investor’s perspective, the strategy offers attractive entry valuations with an imminent exit via public markets, thereby mitigating the risk involved in unlisted securities.

The statement said the company is one of the key initial players in the late-stage PE space in India, since the launch of Crossover series of funds in 2017. The fund opens access to private investments, which usually are unavailable to most Indian investors like existing and emerging leaders, including technology businesses like fintech, edtech, healthtech, digital media and digital commerce. It also enables investors to capitalize on structural growth trends early on with reasonable exit time horizons, the statement said.

Crossover I and II launched in November 2017 and September 2018 have invested in NSE, Sapphire Foods, Affle, Indiamart, CAMS, Amber, Medplus and other industry leaders across sectors. The funds have thrived through two crises and delivered benchmark beating returns of 16.2 per cent and 28.7 per cent since inception. Crossover I has distributed over 60 per cent of the capital raised, having successfully exited part of its portfolio, it added.