Edelweiss Alternative Asset Advisors (EAAA), an alternative asset management platform, Tuesday said it has raised $425 million (Rs3,400 crore) for its third Special Situations Fund (ISAF III).

The fund got commitments from leading global institutional investors, including large insurance companies and pension funds as well as HNIs and family offices from India, the fund manager said in a statement.

The fund is targeting to raise $1 billion, with a green shoe option of $500 million, the statement added. It has already invested more than Rs1,000 crore in a short period of time in two bespoke special situation opportunities, it added.

ISAF III is the third fund in the Edelweiss Special Situations Fund series. The Series II Fund in this strategy had seen the largest fundraise in alternatives in India in 2018, EAAA claimed. Series II, apart from investing over Rs10,500 crore across deals, has also exited several transactions and realised more than Rs9,500 crore from portfolio companies.

The special situations strategy focuses on asset-heavy companies and identifies viable underlying businesses that, EAAA believes, have a strong turnaround potential and/or invest in situations where resolution of assets requires capital and domain expertise.

“Special situation opportunities provide an exciting avenue for generating superior risk-adjusted returns for investors. The fund strategy caters to both corporates looking for specialised financing solutions to turn around their business fortunes as well as financial institutions looking to sell their existing portfolio assets. Acquisition financing under the bankruptcy process is also emerging as a good opportunity set. We believe that the investors in special situations strategy can generate high returns, akin to equity, while mitigating downside risks,” said Amit Agarwal, head, special situations strategy.

EAAA claims to have built one of the largest domestic alternative platforms with assets under management (AUM) of $5 billion.