Mumbai:Old Bridge Capital Management has raised around Rs1,200 crore for its alternative investment fund (AIF) that will invest in publicly listed companies, founder Kenneth Andrade said.
The fund plans to raise Rs150 crore more from investors, said Andrade, who was chief investment officer at IDFC Asset Management Co. before starting Old Bridge in 2015. It also runs a portfolio management service with over $200 million in assets.
“As per regulations, we could have kept the fund open and collected money right through one year, but that takes away a lot of focus from money management. So, what we did was we raised the first tranche and we deployed all of that money, gave it one-two months to settle down. We raised the second tranche post-December quarter results coming through. And now, the March results are coming and post that, we are raising the third tranche," said Andrade.
Old Bridge started work on the fund—Vantage Equity Fund—in December, raising a first tranche of Rs700 crore, followed by another tranche in March that took its assets under management to Rs1,150-1,200 crore. Vantage Equity Fund is a closed ended Category 3 AIF. Categories 1 and 2 cater to venture capital, private equity and debt and infrastructure funds, while Category 3 funds are public market funds.
In November, Mint reported that Old Bridge was looking to launch its first AIF to invest in listed stocks. Andrade has over 25 years of experience in Indian capital markets. At IDFC, he was responsible for the performance of a corpus of $8 billion.
“We have a regulatory limit of 1,000 investors and currently we have over 800, so we have space to raise capital from around 180 more investors, Andrade said.
The Vantage Equity Fund aims to invest largely in midcap companies, focussing on industries that are going through a down cycle.
“We like to buy the businesses on the downcycle so that as the cycle turns, we sort of start early into the entire curve. That has been the strategy for us. So, we have a significant exposure across the entire power/electricity value chain, lot of cable and broadband companies. We also have exposure to autos and chemical businesses, which are more of a mid-cycle play," said Andrade, adding that agri and rural-focused businesses is another space where the fund is interested in investing.
Old Bridge Capital is also targeting the SME space and intends to invest 5% of its corpus in companies listed or will be listing on SME exchanges.
“With GST and demonetization, we saw the organized part of the market gain a reasonable amount of momentum. You are seeing the larger of the unorganized participants actually going the organized way. The reason for them listing is that they require a balance sheet. They are fairly material businesses and they operate in industries which are large and scalable," said Andrade.
The Category 3 AIF space has seen strong traction in the last couple of years, with fund managers launching unique strategies and investors looking to diversify their equities portfolio. According to data from Sebi, Category 3 AIFs raised a total of Rs14,333 crore in the calendar year 2017, compared to a total of Rs7,691.9 crore in the previous four years.