Brookfield, State Bank of India plan $1b distress fund

Brookfield will manage recapitalized businesses as part of the joint venture and SBI will contribute as much as 5% of the total investment. The vehicle is expected to target distressed SBI clients through equity and short-term loans.

"This is a great opportunity for us to continue to invest in the long-term India story, and we're pleased to be further expanding our private equity platform here," said Anuj Ranjan, head of Brookfield India, according to The Economic Times.

Launch of the fund follows Reserve Bank of India estimates that domestic banks' non-performing loans now total more than INR7 trillion. It also underlines the increasing role of private equity in helping banks to clear distressed assets off their books and free up credit to loan to other companies, regulators and the government.

Recent activity in this space includes the creation of a distress-focused JV between US private equity firm J.C. Flowers and India's Ambit Holdings as well as a commitment from TPG Capital to invest up to $3 million in the country's underperforming companies. Canada Pension Plan Investment Board, meanwhile, has partnered with Kotak Mahindra Group to invest up to $525 million in struggling domestic assets.

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• Topics
• South Asia
• Credit/Special Situations
• Fundraising
• GPs
• India
• Canada
• Brookfield Asset Management
• Distress