Blackstone-Backed ASK Launches New Hedge Fund Targeting UHNWIs and Family Offices
Supported by Blackstone, ASK Asset and Wealth Management Group has initiated the ASK Absolute Return Fund through its subsidiary, ASK Hedge Solutions.
This initiative targets ultra-high-net-worth individuals (UHNWIs) and family offices, with goals to gather $361M within the next six months.
This newly introduced fund is an open-ended category 3 long-short Alternative Investment Fund (AIF) without a fixed duration, aiming to be a key holding in investors' portfolios. Its focus is on offering risk-adjusted returns that surpass those of liquid fixed income options, emphasizing low volatility and minimal drawdowns.
During a media briefing in Mumbai on March 18, Vaibhav Sanghavi, the CEO of ASK Hedge Solutions, highlighted the appeal of the alternatives sector, especially following regulatory changes that make these investments more competitive. He noted that category 3 AIFs are poised for significant growth as investor familiarity with hedge fund strategies increases.
Category 3 AIFs are known for their sophisticated trading strategies, in contrast to category 1 AIFs, which focus on startups and SMEs, and category 2 AIFs, which include real estate and private equity funds.
Sunil Rohokale, the managing director and CEO of ASK Asset & Wealth Management Group, mentioned that globally, long-short funds represent about 4-5% of total assets. He expressed confidence in the growth potential of this investment category in India, driven by the expanding ultra-high-net-worth individual segment.
The fund plans to attract offshore investors as well, including family offices, funds of funds, endowment funds, and UHNWIs accustomed to hedge fund investments. It will also welcome investments from ASK Private Wealth clients.
Interest from offshore investors, including global institutions, in India-focused hedge fund solutions has been rising, supported by a positive market climate and initiatives like Gift City, as per Sanghavi.
The entry point for investing in a category 3 AIF is set at approximately $120,000 or Rs. 1 crore.
Alternative Investment Funds have seen substantial growth as an investment option in India, especially for wealthy Indians seeking diversification in private markets. This trend gained momentum when debt funds lost their long-term tax advantages, according to wealth managers speaking with Citywire Asia.
The count of AIFs registered with SEBI increased from 173 in March 2022 to 207 in March 2023.
While investors in category 1 and 2 AIFs benefit from a pass-through taxation regime, allowing tax obligations to be transferred to the investors, category 3 AIFs do not enjoy this benefit and are taxed at the fund level.
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