Mumbai: Old Bridge Capital Manager, an asset management firm founded by Kenneth Andrade, former chief investment officer of IDFC Asset Management Co., is launching a public markets focused alternative investment fund (AIF), targeting a corpus of Rs400 crore. This is Old Bridge’s maiden AIF. The firm, which started its portfolio management service in 2016, manages over $200 million in assets and has around 700 clients.
Andrade has over 25 years of experience in Indian capital markets. At IDFC, Andrade was responsible for the performance of a corpus of $8 billion. Old Bridge is targeting a base corpus of Rs100 crore for its fund ‘Vantage Equity Fund’, with a green shoe option of another Rs300 crore, said Andrade.
“We will launch the fund in the first week of December. It is a three-year closed ended category 3 AIF," he said.
AIF regulations notified by markets regulator Securities and Exchange Board of India (Sebi) in 2012 divide privately managed funds into three categories. Categories 1 and 2 cater to venture capital, private equity and debt and infrastructure funds, while Category 3 funds are public market funds.
The capital will be raised largely from high net-worth individuals and family offices.
“It’s an extension of the products that we have, and so our investment strategy won’t be very different. The AIF structure allows more operating ease compared to managing individual managed accounts and it is much more scalable, so you can onboard a lot of investors," said Andrade.
Vantage Equity Fund will focus on investing in companies which are operating in industries that are not doing well and which have depressed valuations, Andrade said.
“Themes that we will focus on include midcap rural focused businesses, manufacturing and engineering businesses and early cycle asset intensive businesses such as infrastructure. We will look to build a portfolio of around 25 companies," he said.
While the fund will look at investing in sectors and companies that are not doing well, it will stay away from companies with high leverage. “From an investment style perspective, we take enough of business risk, we do not want to add financial risk. The dynamics of the stock change dramatically with high leverage," he said.
Also, in the initial phase, the fund will not look at investing in financial services businesses, he added.