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EDELWEISS CROSSOVER OPPORTUNITIES FUND

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Fund Snapshot

Fund Type Close-ended Category II AIF
Investment Manager ESL Securities Limited
Inception Date 09 March 2021
Fund Manager Mr Pranav Parikh
Fund Size INR 1,000 Cr with a Greenshoe option of INR 1,000 Cr
Minimum Investment INR 1 Crore
Fund Tenure & Closings 5 years from Final Close With a maximum of two extensions of 1 year each
Commitment Period 30 months from Final Close
Sponsor Contribution 2.5% or INR 5 Cr, whichever is lower
Upfront Drawdown 25% of the Commitment Amount

Fund Announcement from Edelweiss Wealth Management

Edelweiss Wealth Management (EWM) has announced the establishment of the Edelweiss Crossover Opportunities Fund (Crossover III), which has a target corpus of INR 5000 crore (USD 700 million). It would be a Category II AIF, focusing on late-stage private equity and pre-IPO investments, a market that the Crossover series has pioneered in India. Since then, the late-stage PE industry in India has gained traction, rising to a new level of size and bringing up new prospects. After raising INR 2200 Cr in the previous series, Crossover III will witness the greatest money raised in the series.

With this fund, Crossover III will continue to expand on the platform’s experience, knowledge, and capacities to provide the market with flexible and tailored financing options. The Fund will work with top-tier entrepreneurs and management teams to help them transition from privately owned firms to high-performing, long-lasting public franchises. 

The fund’s late-stage PE / Pre-IPO approach allows investors to have access to private investments that are often unavailable to most investors, allowing them to profit from structural growth trends early on with realistic exit time horizons. Aside from that, the fund will provide significant allocation to investors who want to participate in new and rising leaders of India’s future through its investment in IPOs of high-quality firms. Despite recent market crises, this approach has performed well in terms of producing steady returns and lower than market drawdowns during this period of great volatility.

Investment Objective

The fund managers think that IPOs outperform larger markets, thus they plan to invest as late-stage PE investors in rising brands and industries to maximise profits. Bringing together pre-IPO / late-stage PE investing skills, leadership, and track record:

  • Pre-IPO / Late-stage PE investment framework that is proprietary.
  • Hybrid private + public market capabilities provide a crossover advantage. 
  • Delivering excellent risk-adjusted returns and prompt liquidity is a track record.

Pillars of Value Creation

  • SELECTION: Team with a mix of PE-style rigour, analytic experience, and public markets knowledge
  • ACCESS: Edelweiss’ ties, the team’s exclusive sourcing for pre-IPO / late-stage PE and IPOs, and the Crossover Brand in pre-IPOs
  • RISK MANAGEMENT: Exit management is emphasised during the investment selection process and afterwards, as well as risk management capabilities.

Fund Specifications

To create alpha, crossover combines numerous levers. Such as: 

  • IPO investments with pre-IPO discounts – invest at private market valuations with the knowledge that the IPO will be exited at public market valuations.
  • Early identification of high-quality future leaders in new and developing India, as well as access to them.
  • Access to the finest private investment conditions, based on the capacity to deliver customised solutions to unique pre-IPO scenarios.
  • Through PE-style participation, value is created through influencing outcomes and driving performance in portfolio firms.

FAQ

Who is the targeted sector for this fund?

The fund seeks to invest in commercial service, industrial, e-commerce, and food tech companies.

What location is Edelweiss Crossover Opportunities Fund based on?

Mumbai, India

What Edelweiss is willing to do with this fund?

Crossover III will use this cash to build on the platform’s expertise, knowledge, and skills in order to provide the market with flexible and customised financing solutions. The Fund will engage with top-tier entrepreneurs and management teams to assist them in transitioning from privately held companies to high-performing, long-lasting public franchises.

How does Edelweiss Crossover Opportunities Fund operate its risk management?

Exit management, as well as risk management competencies, are emphasised both during and after the investment selection process.

What are the themes of interest of this fund?

Consumer Internet, Fintech, Banking, Financial Services, and Insurance, Consumer Brands, Specialized Manufacturing, and Business Services with novel business models

About Fund Managers

Pranav Parikh ( Fund Manager ) 

Pranav Parikh
Under Edelweiss Asset Management Ltd, Pranav Parikh handled Crossover I and II. Q Investments’ franchise in India was previously built up and formed, including investments in private equity and public markets. Global M&A Network named him India’s Private Equity Deal Maker of the Year. Profitable exits from critical investments in India, with considerable cash, returns to investors, amid one of the most difficult periods in the global investment sector. With an emphasis on risk-adjusted returns, he has over 20 years of successful investment expertise in the US and Indian markets.
He formerly worked at Q Investments, a $ 4 billion multi-strategy fund based in the United States. Long-term buy-side experience with the most complex capital structures and strategies, including public and private equity, high yield, convertibles, distressed debt, and unique scenarios such as merger and convertible arbitrage, spin-offs, recaps, and LBOs.

Nalin Moniz : Chief Investment Officer – Alternative Equities, Edelweiss AMC

Nalin Moniz Edelweiss AMC
A graduate of the Jerome Fisher Program in Management and Technology from the University of Pennsylvania (USA); with joint degrees in Economics from the Wharton School & Computer Science Engineering from the Moore School, meet the CIO of Alternative Equity at Edelweiss Asset Management – Mr. Nalin Moniz, CFA.

Nalin was earlier associated with Goldman Sachs Asset Management as a Portfolio Manager when he thought of starting his own venture in India by the name of Forefront Capital Management, an alternative asset management firm, which was acquired by Edelweiss in 2014.

With a decade and a half of financial experience under his belt, he played a pivotal role in Edelweiss’ acquisition of Ambit Capital’s AIF business in 2016.

A marathon enthusiast, he has run races in Amsterdam and Berlin in the last two years. When asked his secret to running 42.195 km, he said “You run 1 km 42 times.”

At Edelweiss Asset Management, he leads the research and portfolio management for the alternative equity funds across AIF, PMS and offshore platforms in addition to being the fund manager for the Edelweiss Alternative Equity Scheme.

He’s also been a Eureka Hedge Indian Hedge Fund of the Year nominee in 2014, 2016 and 2017 and voted as one of the top 40 under 40 professionals in Indian alternative investments.

Investment Philosophy

The fund management team thinks that late-stage private equity investors have a particular edge in terms of timing, precisely as a company’s potential is about to be unlocked. The Crossover fund comes into play when several PE exits and liquidity for the promoter family are required. To generate optimum profits, the fund focuses on mass-market companies with scalability and visible space for development.

Fund’s select themes of interest

  • Consumer Internet: Leading consumer brands are making use of digital media.
  • Fintech: Fintech firms are using technology and data to improve financial services.
  • Banking, Financial Services & Insurance: Companies in the financial services industry that are rapidly expanding and have a distinct competitive advantage in particular sectors.
  • Consumer Brands: New-age consumer brands that cater to certain demographics
  • Specialized Manufacturing: Differentiated value-added manufacturers
  • Business Services: Company services that are important to the success of innovative business models

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.