New Delhi, June 23 -- EAAA India Alternatives Ltd, the alternative asset management platform of the Edelweiss group, has hit the road to raise its fourth special situations fund under the private credit arm, multiple people familiar with the development told VCCircle.
EAAA operates two business verticals, that of private credit and real assets. The private credit vertical largely invests in debt or convertible debt instruments. So far, EAAA has made 181 investments in the private credit vertical, and fully exited around 110 of them.
The real asset vertical, which invests in a mix of equity, quasi equity and debt instruments, has generated only three full exits, while a total of 36 investments have been made, as per latest data available.
The fund house is currently marketing its fourth special situation fund, engaging with limited partners (LPs) through roadshows and meetings, one of the persons mentioned above said. "Its been a few months since the fund has gone live and is currently being actively marketed among institutional investors, family offices and the wealthy lot," he added.
The fund is targeting a corpus of $1.5-2 billion (around Rs 14,205-18,939 crore) for the scheme, two persons cited above said. According to both, while it can top the $1.5 billion mark for the current fund, the prevailing market situation could pose a bit of a challenge for the fund manager. The prevailing market situation has slowed down activities for fund managers at large, they added.
The second person said that the firm is raising capital from both domestic as well as offshore investors for the scheme, like its predecessors. "The firm has tapped both global as well as domestic investors across all its special situation vintages, so it will follow the same fundraising strategy this time around too," he added.
EAAA spokesperson declined to comment on the development.
In its previous outing, EAAA raised $1 billion, or about Rs 8,000 crore back in 2023. The fund had a target corpus of $1 billion and a greenshoe option of $500 million.
It garnered about $1.2 billion for its second special situation fund when it closed in January 2019. That was the largest fundraise in alternatives in India, with Canadian pension fund CDPQ as one of the key investors.
The special situation vertical provides financing for companies in special situations, including buyouts of stressed loans and high-yield senior financing. It focusses on investments in inherently viable companies that have a positive EBITDA and targets companies that offer multiple exit options, ensuring capital protection while delivering returns.
Meanwhile, EAAA Alternatives, which recently received approval from the Securities and Exchange Board of India (SEBI) for a public float, is preparing the groundwork for floating its initial public offering (IPO). In the midst of its planned IPO, its co-chief executive officer (co-CEO) Subahoo Chordia stepped down with Amit Aggarwal taking over as the sole CEO of the platform.
As per the DRHP of the company, its special situations platform aims to provide financing solutions to corporates that have previously experienced special situations leading to reduced profitability or market share and are currently in the revival process. It also intends to leverage the secondary loan sale market for early-stage stressed companies where existing financial creditors lack the capability to assist and prefer to exit such positions by selling to special situation funds.
It says that the special situations market will also benefit owing to changes in the regulatory environment especially in the insolvency and bankruptcy processes thereby opening an opportunity for a pie for $82 billion to $85 billion stressed asset market in India.
"We provide primary financing, including last-mile financing, for quality businesses looking to revive their business fortunes. This will facilitate one-time settlements with banks and involve equity or structured buyouts to take an active role in driving operational improvements and strategic realignments," the DRHP stated.
Published by HT Digital Content Services with permission from VC Circle.