Edelweiss closes India stressed asset fund at $1.3b
Edelweiss Alternative Asset Advisors, the alternative investment arm of India’s Edelweiss Group, has raised INR92 billion ($1.3 billion) for its second fund focused on investments in Indian stressed assets.
Investors in Edelweiss India Stressed Asset Fund II (EISAF II) include global insurance companies and pension funds, as well as high net worth individuals and family offices in India and overseas, according to a statement. The fund will invest in viable non-performing assets (NPAs) with established infrastructure, viable business models and the potential to generate cash flows.
Edelweiss plans to revive its investees through a combination of last-mile financing, financial restructuring, and operational turnaround assistance. The firm will leverage the experience it has gained in this area through Edelweiss Asset Reconstruction Company (EARC), which is backed by Caisse de dépôt et placement du Québec (CDPQ) as well as other investors. EARC’s total credit book stood at INR420 billion for the year ended March 2018 across corporate, retail, and distressed credit, up from INR276 billion the prior year.
Indian NPAs have generated increasing investor interest in recent years as the growing level of bad loans in the banking system has limited financial institutions’ availability to provide credit and threatened to restrict economic growth. The introduction of a new bankruptcy code is seen as a major step toward lowering the protections for borrowers that have historically made asset recovery difficult.
A number of foreign GPs have entered the market via partnerships with local distressed asset specialists. Examples include India Resurgent Fund, a joint venture between Bain Capital Credit and Piramal Enterprises. Aditya Birla Capital and Värde Partners launched a similar venture last year.
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