Edelweiss to raise Rs 500 crore for ‘mid-cap’ fund

By Indulal PM

MUMBAI: Domestic investment bank Edelweiss Financial Services is raising Rs 500 crore from domestic institutions, high networth individuals and family houses for a fresh fund to invest in mid and large-cap stocks.

Edelweiss has tied up with Accuracap, a technology firm, to develop its market strategies, Anshu Kapoor, head, global wealth management at Edelweiss, told ET.

Investments will be made on the basis of big data and behavioral analytics, he said. Edelweiss manages Rs 20,000 crore under its wealth management arm through various schemes, with most of the capital being raised from ultra-high networth domestic individuals and institutions.

"We have already launched the soft marketing of the new fund. This would be an open-ended and long-only fund,” he said.

"The performance would be key and we have tested this product in the past. It has outperformed most of the traditional fund houses and PMS services,” said Kapoor.

The fund-raiser is coming at a time when benchmark indexes rebounded from a 15-month low hit earlier last month. Last year the Indian stock market rose almost 30 per cent and was one of the best performers in the world.

Foreign institutional investors, who were the backbone of last year’s rally in Indian shares, sold a net of $2.6 billion in the September quarter, the most since the three months ended December 31, 2008, when they sold a net $3.3 billion, according to data compiled by Bloomberg.

"The fall in markets has made valuations a bit more reasonable. Current levels offer reasonable an opportunity for the investor with a 2-5 year horizon. Also, since it’s a domestic fund, its free from currency risks as well,” Kapoor said.

"Compared with the benchmark, the strategy outperforms both in terms of risk and return.”