Edelweiss Financial Services (EFS) is in the process of acquiring the Ambit Alpha Fund, a long-short fund from Ambit Investment Advisors with an asset size of Rs 1100 crore. The price of acquisition has not been disclosed by the acquirer.
“It was an opportunity to add to our existing suite of products meant for HNI clients. In general we are looking for acquisitions to grow our business in the asset management space or otherwise. The Alpha Fund was a good fit for us”, says Venkat Ramaswamy, Executive Director, Edelweiss Financial Services (EFS). Rashesh Shah and Venkat Ramaswamy set up the firm in 1995 with its roots in capital markets which has now grown into a well diversified financial conglomerate group.
The Alpha fund is in line with the multi-strategy funds which utilize the long-short strategy to maximize returns. EFS has a total asset size of Rs 35000 crore which includes its mutual fund business, the multi-strategy funds, the credit alternative funds and the distress assets management funds.
The objective of the Alpha Fund, a category III Alternative Investment Fund, is to produce absolute return through both long and short strategies in equities. The fund manager, Andrew Holland who has been managing the fund since 2013 will exit the fund. EFS did not give any details about the new fund manager as they prefer to keep their fund manager anonymous or away from the public view.
This is the second time that EFS has acquired a long short fund. In 2014 they acquired Forefront Capital Management, a fund that was co-founded by Radhika Gupta and Nalin Moniz with assets worth Rs 150 crore. Over the next two years, EFS claims that this number has gone up by ten times. “We believe that we can do the same with the Alpha fund which is a complimentary product to Forefront”, says Ramaswamy.