Blackstone-backed ASK enters hedge fund biz, hires former Avendus executive

Bengaluru: ASK Group, backed by private equity giant Blackstone, has forayed into the hedge fund vertical, in line with plans to expand its footprint in alternative investments and has recruited a senior executive from Avendus Capital to head the new business.

The Mumbai-based asset and wealth management group said Monday that ASK Hedge Solutions will help investors diversify their asset allocation and generate risk-adjusted returns.

The group has appointed Vaibhav Sanghavi, former co-CEO of KKR-backed Avendus Capital’s Public Markets Alternate Strategies, to lead the vertical.

Sanghavi comes with an experience of more than two decades and has held key managerial positions at Ambit Pvt. Ltd. and DSP Merill Lynch, apart from Avendus.

“We understand that compounding our investors’ portfolio returns in the long term involves capitalizing on diverse investment opportunities, including hedging against market risks. In India, the opportunity for alternates is untapped and has immense potential for growth, with the total market size poised to grow beyond $50 billion,” said Sunil Rohokale, managing director and chief executive officer of ASK Group.

VCCircle had first reported that ASK Group was set to launch a hedging solutions strategy as part of its plan to grow its alternatives AUM in the next three-four years.

Explaining the rationale behind launching a hedging solutions vertical, ASK Group said in a statement that long-short funds, which are classified as category-III alternative investment funds (AIFs), are “known for their potential to generate alpha and provide a hedge against market volatility and have become increasingly popular among investors seeking sophisticated investment options.”

The asset manager will tap family offices, corporate treasuries, trusts, ultra-high-net-worth individuals (UHNIs), and high-net-worth individuals (HNIs) for these long-short funds.

In an earlier interaction with VCCircle, Rohokale had said that among key hedging strategies, ASK would first launch a long-short category-III vehicle registered with the Securities and Exchange Board of India, with a corpus of ₹1,500 crore. This vehicle, like its other alternative investment strategies, would aim to generate mid-teen returns for investors.

The hedging solutions strategy will also see the launch of long-only funds, Rohokale had earlier said. Currently, ASK Group’s alternative strategies include real estate investment funds, managed by ASK Property Fund; its recently launched private credit strategy; and equity funds.

All of ASK Group’s alternative investment asset classes including real estate, private credit and hedging solutions will together propel its alternatives assets under management (AUM) to about $5 billion (about ₹45,000 crore), from $1.45 billion, or about ₹12,100 crore currently.

Among these strategies, real estate will comprise about a third of the total alternatives AUM in the next five years. Long-short fund strategies will comprise about ₹12,000 crore of the total. Performing credit and long-only fund strategies may amass an AUM of about ₹8,000 crore each in this period, he had said.

ASK Group launched its maiden private credit fund in August, joining many other asset managers who are tapping into the growing asset class. The wealth advisory firm aims to raise about ₹1,000 crore for the AIF. The fund will be operating in the performing credit segment and will avoid distressed assets, real estate, utilities, state-owned companies and venture funding situations. It also appointed Shantanu Sahai as senior managing partner to lead the fund, who was previously managing director and head of debt at Nomura.

On the real estate AIF side, the wealth manager has so far made 19 exits across funds. It marked the final close of its sixth fund at ₹1,500 crore (about $183.5 million), including co-investments from its investors in May, slightly lower than its target of ₹2,000 crore.