
ADV seeks $500m for Asia special situations fund
ADV Partners, a PE firm set up by former executives from Mount Kellett Capital, is targeting $500 million for its debut Asia-focused special situations fund. The hard cap is $750 million.
Citing factors such as tight local monetary conditions, banks scaling back in response to Basel III requirements, stressed corporate balance sheets in China and India, and private equity funds looking for exits, the ADV team argues that there are more opportunities in special situations than at any time since the Asian financial crisis.
The PE firm is led by Brad Landes, most recently deputy head of Asia at Mount Kellett and previously head of J.P. Morgan's loans and distressed group in the region. Suresh Prabhala, formerly Mount Kellett's head of India, is responsible for South Asia, while Jianyi Zhu covers North Asia, having also fulfilled a similar role at Mount Kellett.
The prospective team includes 4-8 investment professionals who have worked with the principals for at least four years.
The fund will focus on mid-size deals of $30-60 million with larger transactions addressed through co-investment alongside LPs and other funds. Single transaction exposure is capped at $75 million while a single country can account for no more than 40% of the corpus.
ADV expects India to account for the largest portion of the fund, followed by Southeast Asia and China. Investments will be predominantly special situations and restructuring, with some exposure to deep value equity and distress.
Mount Kellett closed its second special situations fund at $4 billion in April 2012. It is a global vehicle but a sizeable portion has been earmarked for deployment in Asia. Several regional distress and special situations funds have been raised in the last year, notably Clearwater Capital Partners, which raised $575 million, and SSG Capital, which reached the hard cap of $400 million on its second fund.
For India specifically, ICICI Ventures and Apollo Global Management have reportedly raised $325 million and are targeting $500 million in total, while Tata Capital plans to raise nearly INR5 billion ($94 million) for its maiden distress fund.
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