Edelweiss Wealth Management (EWM), backed by Asian investor PAG, has launched a venture debt fund, Edelweiss Crossover Yield Opportunities Fund (ECYOF), to raise Rs 3,000 crore (approximately $361 million – including the green shoe option), according to the company.
The close-ended Category II alternative investment fund (AIF) makes debt investments in emerging startups, generating equity-like returns with debt-like risks and regular cash flows.
“The fund is being launched when a funding slowdown has gripped the private capital markets, making founders and promoters more sensitive to equity dilution while having to ensure capital sufficiency for growth. ECYOF is a much-needed alternative that allows venture/private equity-backed high-growth companies to raise additional capital to augment equity financing and continue their growth trajectory,” the company said in a statement.
ECYOF will invest across growth stages beginning with Series A and will be sector-agnostic in order to achieve a well-diversified portfolio.
The fund is managed by Pranav Parikh, CFA, Managing Partner and Head of Private Equity, and Gaurav Gairola, Senior Investment Director, who have 25 and 19 years of investment experience, respectively, with significant exposure to credit strategies.
“With the launch of this fund, we extend our offering to help emerging start-ups and enterprises scale with a debt offering apart from our industry-leading equity funds…We will bring a full set of unmatched value-added services to our investee companies. These include growth capital solutions of debt and equity, ESOP financing for founders and management teams, treasury and forex expertise, as well as the ability to leverage our strong wealth relationships..,” said Pranav Parikh, Managing Partner & Head, Private Equity, Edelweiss Wealth Management.
ECYOF will aim to provide consistent quarterly coupon distributions to its investors, facilitating liquidity and providing predictability of returns. ECYOF will seek to generate additional returns by monetizing the product’s equity optionality.
Categories: Startups & SMBs