Axis MF, Inversion Advisory launch AIF to invest in underperforming firms

Plans to raise Rs 3,500 cr; Axis AMC to be investment manager of the fund, Inversion to provide operational and turnaround expertise

Axis Asset Management Company (AMC) and telecom sector veteran Akhil Gupta-led Inversion Advisory Services have entered a partnership to invest in underperforming companies. The joint entity plans to raise Rs 3,500 crore for the proposed new alternative investment fund (AIF).

The fund will acquire controlling stake primarily in pre-stressed, stressed, distressed and other underperforming assets. Axis AMC will be the investment manager of the fund with its end-to-end investment and fund management credentials.

Inversion will provide operational and turnaround expertise for the fund. The investment manager will employ a team to evaluate potential opportunities. Inversion would provide management support to acquired companies with its team of functional and industry experts.

An application for the fund has been filed with the Securities and Exchange Board of India (Sebi) seeking registration for the proposed fund. The fund could be launched in the next few days.

The AIF will look to take controlling equity stakes in underperforming companies before working with them to turn them around. Later, the fund will look at strategic sale or initial public offering (IPO) to exit from the company. This will be a seven-year fund and can be extended by another two years.

Chandresh Nigam, MD & CEO, Axis AMC said, “With our entry into the exciting space of turnaround investing, we believe we have created a unique proposition for investors looking to participate and benefit from the India growth story.”

This will be the first fund managed by the Inversion Advisory Services. Earlier, Gupta's family office had bid for the assets of Videocon Industries when it had come to the National company Law Tribunal (NCLT).

Gupta, Chairman, Inversion Advisory Services said, “The partnership is ideal not just to exploit large untapped potential in this space, but also to serve an important social purpose in saving a large number of jobs and capital already invested by shareholders, lenders and vendors in such companies.”