A Fund Of New Possibilities

WHY ALTERNATIVE INVESTMENT FUNDS ARE GAINING TRACTION WITH WEALTHY INDIANS.

- Deepika Asthana

AVENDUS ENHANCED RETURN FUND (AERF), launched by global financial services company Avendus in India in December 2017, provided overall returns of 11.71 per cent till end-June this year, while the National Stock Exchange’s Nifty rose 5.12 per cent in the same period. Even when the Nifty fell by 5 per cent in February, the fund’s value had dropped by only 0.81 per cent. Ambit Alpha Fund (AAF), run by domestic financial services heavyweight Edelweiss Asset Management – which it acquired from Ambit Investment Advisors in September 2016 – has delivered 12-15 per cent returns every month, without once going negative.

Both AERF and AAF are alternative investment funds (AIFs) – which go beyond the traditional asset classes of stocks, bonds and cash. Their numbers in India have been swelling – from 92 in 2015 to 395 now – while the assets they manage have grown from ₹70,266 crore in December 2016 to ₹141,119 crore in December 2017. These funds are of various kinds, but are all defined by their investment approach – not necessarily their platforms – whose prime objective is to generate enhanced risk-adjusted returns rather than total returns. “The goal of AIFs is to optimise returns and not necessarily to maximise them,” says Vaibhav Sanghavi, Co-CEO, Avendus Capital Public Markets Alternate Strategies.