Mumbai: Insurer Allianz AG, through its investment management arm Allianz Investment Management, has invested more than $200 million in the private debt platform of financial services group Edelweiss.
The deal marks Allianz’s first investment in the private debt and distressed assets space in India, while it is Edelweiss’s second global partner for stressed assets and credit, after Caisse de depot et placement du Quebec (CDPQ), one of Canada’s largest pension fund managers.
The Allianz investment is part of the $1.3 billion worth of commitments that Edelweiss has secured for its EISAF II fund.
The investment mandate of EISAF II is to make value investments in stressed assets with an aim to turn around viable non-performing assets. The fund is focused on assets with established infrastructure, viable business models and potential of generating cash flows.
“The partnership with Allianz comes at a time when there is a need for long-term capital in India. We believe that with the constraints faced by banks and NBFCs, there is huge opportunity for private debt managers. At Edelweiss, we have invested in building deep capabilities in this space," said Venkat Ramaswamy, executive director at Edelweiss Financial Services Ltd.
The EISAF II fund is part of Edelweiss’s alternative assets business, a nine-year-old venture for the group, and which currently has $3 billion in assets under management (AUM).
Edelweiss had raised $77 million in its first distressed focused fund in 2010.
“As a long-term investor, we would like to benefit from the continuous growth potential of the Indian economy and contribute by financing attractive companies," said Sebastian Schroff, global head of private debt and opportunities at Allianz Investment Management.
Apart from EISAF II, Edelweiss is also looking to raise about ₹4,500 crore from institutional investors for its infrastructure fund—Edelweiss Infrastructure Yield Plus Fund.
It marked the first close of the fund in May last year, raising around ₹2,000 crore and has set itself a target of raising ₹6,500 crore for the infrastructure fund.