Aditya Birla, Värde launch India distressed asset JV
Aditya Birla Capital (ABCL), the financial services arm of the Aditya Birla Group, and Värde Partners will launch a joint venture to pursue investments in stressed and distressed assets in India.
According to a filing, Värde will pay INR980 million ($13.8 million) for a 50% stake in Aditya Birla ARC, an asset reconstruction company (ARC) established by Aditya Birla last year and currently a wholly owned subsidiary. Värde and Aditya Birla will jointly contribute investment capital to the ARC.
"We see India as a core market for Värde and a critical part of our long-term strategy in Asia," said Ilfryn Carstairs, co-CIO of Värde. "We are particularly excited to partner with an organization with the quality reputation and established relationships of ABCL to address what we believe will be a very large, multi-year opportunity."
Värde currently manages about $14 billion globally, and has invested nearly $500 million in India over the last five years across stressed, distressed, special situations, and lending assets. The firm is planning to open its fifth Asia office in Mumbai later this year.
A number of global investment firms have teamed up with local partners to take advantage of regulatory moves aimed at helping Indian banks clear their backlog of non-performing assets. Those assets accounted for 10.2% of overall loans in the banking system as of September 2018.
Such joint ventures include India Resurgent Fund (India RF), launched by Bain Capital Credit and Piramal Enterprises in 2016 and targeting $1 billion for its initial fund. Apollo Global Management, Brookfield Asset Management, and J.C. Flowers have pursued similar partnerships.
ABCL includes private equity arm Aditya Birla Capital Advisors, along with insurance, corporate lending, structured finance, currency and commodity trading, housing finance, and pension fund management services. Revenue and net profit came to INR1.7 billion and INR615 million for the year ended March 2018.
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