New Delhi, May 7 -- Aditya Birla Sun Life Asset Management Co. is raising a Rs.2,000 crore alternative investment fund (AIF) that will target the stocks of mid- and small-cap companies, joining a growing list of asset managers targeting wealthy investors with hedge fund-style products.

The fund, ABSL Select Sector Fund, will open with a base corpus of Rs.1,500 crore and a greenshoe option of Rs.500 crore, executives at the Mumbai-based firm said. The fund will have a seven-year tenure, which can be extended by two years, and will follow the company's portfolio management service (PMS) strategy, according to investor documents reviewed by Mint.

The fund has a 12% annual hurdle rate, meaning in some cases performance fees apply only if re...