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Crossover December 2018

Opportunities Fund – Series II

(A scheme of Edelweiss Alternative Investment Opportunities Trust - Category II – Alternative Investment Fund)

Investment Objective Inception Date

16th September 2018
The objective of the Fund is to generate long term capital appreciation/ growth and or absolute returns for investors by
primarily investing in a portfolio of equity and equity related securities of listed and unlisted companies. Fund Manager’s Details

Fund Commentary Fund Manager

Here we go again! I guess it’s that time of the year when everyone takes a look back to see what lies ahead. It was certainly an Pranav Parikh
interesting year with significant volatility that increased over the course of the year. We expect continued volatility this year with Investment Committee
macro global trends that are showing weakening across economies as well as the upcoming central elections in India. Hemant Daga
For our part, we continue to see this volatile markets as an opportunity to selectively add to the portfolio. As mentioned in last Nalin Moniz
month’s letter, we invested in yet another market leader in the consumer space in this country - Sapphire Foods. There are strong
macro tailwinds for the QSR (quick service restaurants) space in India with the onset of urbanization and increasing preference for
quick, reliable and high-quality food. Sapphire is one of the largest food platforms in India. It is one of two major franchisees of KFC NAV
and Pizza Hut in India, and operates over 300 stores in India. KFC and Pizza Hut are globally iconic brands with ~20,000 and
INR 10.492
~16,000 stores across the globe. As a large franchisee of global leading brands such as KFC and Pizza Hut in India and a great
team in place to execute, this investment in Sapphire Foods is consistent with our thesis to partner with structurally high growth
businesses led by strong management teams. With strong tailwinds driven by home delivery through aggregators and its own rapid Fund Facts
expansion plans across its area of service, we are excited to work with the team at Sapphire to help grow its business over the next
few years. We expect the company will be in a position to go public in the next 12-18 months. Apart from such private deals, we have Fund Size INR 1,000Cr, with INR 500Cr
been ideating and researching select ideas from the recent IPO universe and will be adding a few select companies to our portfolio green shoe option
over the course of next few weeks.
Drawdown (%) 30%
Your investment portfolio today consists of market leaders ranging from the largest stock exchange to one of the largest QSR
companies in this country. We believe we have a high quality growth portfolio in structurally growth sectors and will continue our Fund Life 48 months from final close,
quest to identify and invest in such opportunities with a margin of safety in pricing. As always, we remain available for any questions
you may have.
option to extend by 12 months
Fund Performance Commitment 24 months from
Period initial close
XIRR : 14.01%
Final Close 10 months from initial close
*Inception: 16th September 2018. Returns shown above are of class A1 (Minimum investment INR 1 Crore) assuming all drawdown
amounts are paid on respective due dates; Ticket Size INR 1 Cr minimum
Past performance may or may not be sustained in future.
Investment Edelweiss Asset Management
Portfolio Holdings Portfolio Analysis: Sector-Wise Manager Limited
Trustee Vistra ITCL (India) Ltd.
Name of the Instrument Weight (%)
Custodian Edelweiss Custodial
Consumer Discretionary 48% Services Ltd.
NSE Ltd 33%
Schedule of Charges
Sapphire Foods India Private Limited* 48% Set Up Cost:
Upto 2% of aggregate Capital Commitment

Cash and cash equivalent 19% Financial services 33% Minimum Investment & Management Fees:
Class A1 : Rs. 1 crore and < Rs. 5 crore
commitment - 2% p.a
Total 100%
Class A2 : = > Rs. 5 crore and < Rs. 15 crore
0% 10% 20% 30% 40% 50% commitment - 1.75% p.a
Calculation on the basis of current portfolio value. The above bifurcation excludes cash and cash equivalent. Class A3 : => Rs. 15 crore and < Rs. 20 crore
Type of Investment Market cap commitment - 1.50% p.a
Class A4 : => Rs. 20 crore commitment
- 1.00% p.a
Large Cap, Small Cap,
41% Hurdle Rate:
Post tax post expenses 10% p.a. on CAGR basis
Performance Fee:
10% of returns over and above the Hurdle Rate
without catch-up

- 100%

Calculation on the basis of capital deployed.

• Performance is reported net of management fees and fund expenses and gross of performance fees.
• The NAV and returns provided on the factsheet are gross of taxes and performance fees
• Performance numbers reported are unaudited.
*Sapphire Foods India Investment of 48% includes compulsory convertible preference shares of 47.6% and fully paid up equity shares of 0.0019%

For any queries or grievances please write to us at or call us on +91-22-4040 7572.
Alternatively, formal complaints can be launched on
Crossover December 2018
Opportunities Fund – Series II

Stock Rationale
National Stock Exchange of India Limited (“NSE”)
Sapphire Foods India Private Limited (“Sapphire”)
NSE is the largest stock exchange in the country, offering coverage of the Indian capital
markets across asset classes including equity, fixed income and derivative securities. It has Sapphire is one of the largest food platforms in India with 300 stores across Pizza
a leading market share by total turnover in equity cash trading (~86%), and in equity Hut and KFC in India; it also has Pizza Hut and Taco Bell stores in Sri Lanka and
derivatives trading (~94%) segments. NSE has a fully-integrated business model Maldives. It is one of two exclusive master franchisees of Yum Brands in India. It
comprising exchange listings, trading services, clearing and settlement services, indices, was created through consolidation of a number of franchisees by a consortium of
market data feeds, technology solutions and financial education offerings. marquee PE investors. A strong professional management team with high quality
experience has been put in place. We expect the company to deliver high growth
We expect NSE to refile for IPO shortly after resolution of a case with SEBI and would put a driven by structural growth drivers of urbanization and shift towards organized
good probability of IPO this financial year. food services chains, backed by strong management capability and iconic brand
stature of KFC and Pizza Hut.
The fund purchased equity shares worth INR 30 Cr. We will continue to add
opportunistically to this position. This is a pre-IPO investment, and the fund currently holds INR 45.75 Cr worth of
equity-linked securities.

Past Performance is not an indication of future performance. Investments in the Securities Market are subject to Market Risk. Please read the Private Placement Memorandum (PPM) and
Scheme related documents carefully before investing. This document has been prepared by Edelweiss Asset Management Limited (“Edelweiss”) Investment Manager of Edelweiss Multi Strategy
Investment Trust (SEBI Reg. No.IN/AIF3/12-13/0004) and Edelweiss Alpha Fund (SEBI Reg. No. IN/AIF3/13-14/0047), a Cat. III Alternative Investment Funds (AIF) and Edelweiss Alternative
Investment Opportunities Trust (SEBI Reg No. IN/AIF2/17-18/0502), a Cat. II AIF. This Document is strictly confidential and is intended for the use by recipient only and may not be circulated,
redistributed, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of Edelweiss. The information set forth has been obtained from sources
believed by Edelweiss to be reliable however Edelweiss does not make any warranty as to the information's accuracy or completeness. The terms and conditions presented in the fund structure
are subject in their entirety to the Fund's offering document / Private Placement Memorandum (PPM) as amended from time to time. This representation does not constitute an offer or solicitation
to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such an offer.
Investors must take their own investment decision and take appropriate advice as to any applicable legal requirements and any applicable taxation and exchange control regulations in the
countries of their citizenship, residence or domicile, which might be relevant to the subscription, purchase, holding, redemption or disposal of any investments. Performance may vary by investor
and can differ due to timing of investment, strategies employed and other market conditions. For data reference to any third party in this document (material) no such party will assume any
liability for the same. Edelweiss (including its affiliates) and any of its officers, partners, directors, personnel and employees, shall not be liable for any loss, damage of any nature, including but
not limited to direct, indirect, punitive, special, exemplary, and consequential, as also any loss of profit in any way arising from the use of this material in any manner. The recipient alone shall be
fully responsible/are liable for any decision taken on the basis of this material. Edelweiss has/may included statements/opinions/recommendations in this document which contain words or
phrases such as “will”, “expect”, “should” and similar expressions or variations of such expressions, that are “forward looking statements”. The yields may fluctuate depending on various factors
affecting capital/debt markets. Actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with
respect to, but not limited to, exposure to market risks, general economic and political conditions in India and other countries globally, which have an impact on our services and/or investments,
the monetary and interest policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices, the performance of the financial markets in India
and globally, changes in domestic and foreign laws, regulations and taxes and changes in competition in the industry. Hypothetical results are presented for illustrative purposes only.
Notwithstanding the foregoing, each investor (and each director, partner, employee, representative, or other agent thereof) may disclose to any and all persons, without limitation of any kind, the
tax treatment and tax structure of any Fund and its investments and all materials of any kind (including opinions or other tax analyses) that are provided to such investor relating to such tax
treatment and tax structure, provided however, that such disclosure shall not include the name (or other identifying information not relevant to the tax structure or tax treatment) to any person and
shall not include information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws. Edelweiss does not assume any responsibility for any mistakes
which might appear in contents received from third parties. For data reference to any third party in the material in this document, no such party will assume any liability for the same. Any action
taken by you on the basis of the information contained herein is your responsibility alone and Edelweiss or its directors, partners or employees will not be liable in any manner for the
consequences of such action taken by you. Edelweiss and/or its directors, partners and/or its employees may have interests or positions, financial or otherwise, in the securities mentioned in this
There is a risk of substantial loss associated with trading in equities, futures, options, leverage, etc. Before investing please carefully consider your financial position and risk tolerance to
determine if the proposed trading style is appropriate, seek appropriate professional advice. Investors should realize that when engaging in leverage, trading in futures, commodities and/or
granting/writing options one could lose the full balance of their account. It is also possible to lose more than the initial deposit. All funds committed should be purely risk capital. The portfolio risk
management process includes an effort to monitor and manage risk but should not be confused with and does not imply low risk.
The risks and mitigation measures at the fund level are enumerated below:
Concentration Risk: Applicable as per the SEBI (AIF) Regulations, 2012 and adhered to at all times.
Foreign Exchange Risk: Not Applicable
Leverage Risk: As per the SEBI (AIF) Regulations, 2012 and adhered to at all times.
Realization Risk at Fund and Investee Company level: Realization value from the investments may not fully protect our investment in all cases.
Strategy Risk at Investee Company level: Low
Reputation Risk: At fund level, continuous monitoring mechanism of investments and appropriate controls are in place.
Environmental, Social and Corporate Governance Risks: At fund level: Robust mechanism is in place.
At investee company levels: Data on extra-financial risks is available in public domain while details of leverage risk at investee company levels are not available;
Realization risk and strategy risk (i.e. change in or divergence from business strategy at investee company level) is not applicable.
Conflict of Interest: Presently, the Fund is availing securities broking services and custody services of its group entities viz. Edelweiss Broking Limited, Edelweiss Securities Limited and
Edelweiss Custodial Services Limited. Such transactions are at arms length relationship basis and in the ordinary course of its business. Edelweiss Global Wealth Management Limited is the
sponsor to the AIFs.