AGacquisitions group has $40 Million offshore fund
BENGALURU: AGacquisitions Group, one of India’s first few hedge funds, has launched an offshore fund in the Bahamas with an exposure of $40 million raised from family offices and high-net-worth individuals (HNIs) in India and overseas.
Kanishk Agarwal, 32, and his brother Harsh Agarwal, 26, founders of AGacquisitions, have now registered their flagship company in Bahamas as well.
“When we were looking at the offshore space, we had to come up with a jurisdiction that can accept capital from a host of investors, agnostic of where they are resident. We needed a vehicle that can raise capital from across geographies,” said Kanishk Agarwal, founder and managing director of AGacquisitions.
A systematic public market fund, it invests in fixed income securities and index derivatives traded via SGF Nifty in Singapore and SNP500 in the United States. “As our fund size increases and we broaden our investment horizon we plan to use other indices,” said Harsh Agarwal.
“I opted for an offshore investment because it is dollar denominated. As the RBI allows for these accounts and since the rupee has depreciated 50% over 10 years, it’s better to have some savings in a dollar account,” said Vijayan Rajes, an investor in the fund, who belongs to the MSP Coffee Plantation family based in Yercaud, Tamil Nadu. Rajes is also chairman of the advisory board of AGacquisitions.
The Bahamas fund charges a performance fee of 20%. The objective, the founders said, is to be a low risk, medium return fund with an IRR (internal rate of return) between 14% and 18%, and a capital drawdown (the maximum you can lose) of 4-6%.
The fund’s prime brokers in London and Chicago are RJ O’Brien & Associates while its fund administrator is Sterling Bahamas. An investor, who did not wish to be identified, said, “I had invested in the India-based fund and they were pretty successful. Their integrity and honesty to business and to clients as well as meticulousness in compliance to all laws relating to overseas funds is what’s making me consider investing in the offshore fund too.”
AGacquisitions launched in 2010 as an investment banking firm and forayed into the hedge fund industry in 2013 with its India focused fund (AGacquisitions-I), which was backed by family office of the promoters of Stride Arcolabs and some HNIs.
This fund had an exposure of $5-6 million. “We got a return of 51%,” said Kanishk Agarwal. The fund had a management fee of 2% and performance fee of 20%. “For the first financial year, ended March 2015, the returns were around 30%,” said another investor in the India fund who declined to be identified.
