Avendus Wealth Management, the wealth management arm of Avendus Capital, has announced the launch of its first Category III AIF, Avendus Phoenix Fund. This is a closed ended fund with a minimum investment of Rs.1 crore.
A thematic fund, Avendus Phoenix Fund, will invest in companies after assessing operating and financial leverage. Its investment objective is to deliver capital appreciation over long term through a long-only and sector-agnostic portfolio.
In a press release, the company said, “The annual report season has sprung a surprise; pockets of corporate India seem to be coming back to the drawing board for incremental capex plans. This is yet to be reflected as a broader phenomenon across any sector/s, but the green shoots are clearly visible across companies in steel, cement, chemicals, equipment manufacturers etc. Most of the capex might still be in brownfield projects, but it is a clear indicator of the way forward.”
Sharing the rationale behind this fund at this juncture, the company said that this fund is in the backdrop of an increase in order flows and increasing use of capacity across sectors such as roads, transmission and distribution of power, construction and renewable energy.
“This is leading to a better utilization of assets and increased profitability and cash flows. This new fund is centered on this powerful theme because Operating Leverage can turnaround the fortunes of Corporate India as it aims to play out across sectors,” said the company.
The fund will invest in such companies, giving investors an opportunity to be a part of the success story. The fund will invest in a concentrated portfolio of 15-20 companies.
The fund manager of the fund, Aniruddha Naha, Director- Equities, Avendus Wealth, said, “The fund will look to invest in listed companies where there is demand traction and a growing order book which will lead to assets sweating better and drive revenue and profitability growth. Given a slowdown in the economy as it adjusts to the GST and demonetisation effect, this is an appropriate time to launch the fund, as the economy will not only come back to normal stream but continue to grow at higher single digits for the foreseeable future.”
On the new product launch, George Mitra, CEO, Avendus Wealth Management, said, “We see a genuine opportunity in this approach to create value for our investors at a time when valuations are a concern for most people. Aniruddha has consistently demonstrated the ability to pick winners and we see this as a valuable addition to our clients’ portfolio.”