ICICI, Apollo raise $500m distressed fund – report

The vehicle will invest in companies from India or with a significant presence in the country that face financial difficulties, a person with direct knowledge of the development told The Economic Times. Kalpesh Kikani, senior general manager of ICICI Bank, will head up the fund, The Business Standard reported earlier.

Slowing economic growth and tighter credit conditions in India have exacerbated the need for distressed financing. According to Nomura Equity Research, bank lending to small- and medium-sized enterprises (SMEs) is down 2% year-on-year in 2012. Banking sector loan growth across the board is at a 14-year low, increasing just 14% in the current fiscal year, well short of the peak of 31.7% in 2004-2005.

In November, SSG Capital Management, a distressed fund management firm set up by a former executive of Lehman Brothers Holdings, closed a $400 million second vehicle that targets investments in India, China and Indonesia. At that time, the private equity player told AVCJ that there is a lot less competition for deals in India compared to other major target markets as there are few special situations professionals on the ground.

On the other side, a growing number of traditional private equity players are also shifting down the capital structure and pitching credit strategies. KKR, for example, has been actively offering credit solutions via KKR India Financial Services, its non-bank financial company (NBFC), but this uses capital from KKR's own balance sheet rather than through a fund structure with LPs.

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Fundraising
• Credit/Special Situations
• Distressed
• India
• Fundraising
• Apollo Global Management
• ICICI Venture Funds Management Company