Brookfield looks to buy stake in Clearwater Capital-backed Altico
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Canada's Brookfield Asset Management Inc. is looking to acquire a stake in Altico Capital India Ltd, a non-banking financial company that counts Clearwater Capital, Abu Dhabi Investment Council and Varde Partners as its main investors.

The real estate-focussed NBFC has held discussions with various potential investors to provide an exit route to its existing backers, two people familiar with the development told VCCircle, asking not to be named.

One person said Altico has held discussions with Brookfield for capital infusion. “This may lead to all the investors exiting the company or partially selling their stakes,” he said.

The second person said that while Altico has raised debt funding in the past, it is now actively considering options to let its private equity backers exit.

VCCircle could not immediately ascertain if all the three investors in the company would look for a complete or partial exit. But the two people said that opting for a strategic buyer for a full exit or partial exit is the only option since an initial public offering does not look possible in the near future.

Separate emails written to the spokespersons for Altico Capital, Clearwater Capital, Abu Dhabi Investment Council and Varde Partners did not elicit any response till the time of filing this story. Brookfield declined to comment.

Earlier in the day, the Mint newspaper also reported that Brookfield was eyeing a stake in Altico and that Varde Partners might sell its entire stake.

The people mentioned above said that if the deal goes through, it would provide a readymade platform to Brookfield for a debt play in India.

Demand for debt capital from NBFCs in India's real estate sector has grown rapidly over the past few years due to poor sales in the residential segment and banks' reluctance to lend. Developers are increasingly taking on debt to finish projects and let existing lenders exit.

The opportunity also led to a proliferation of debt-focussed alternative investment funds that structure deals like NBFCs and compete with these lending platforms.

Altico Capital

The company competes with the likes of Xander Finance Pvt. Ltd, Piramal Capital and L&T Finance. The Mumbai-based firm was originally established as Clearwater Capital Partners India Pvt. Ltd and was renamed as Altico Capital in 2015.

Clearwater Capital is an Asia-focussed special situations investment advisory firm that does both PE-style equity deals as well as debt transactions. Varde Partners is a global alternative investment firm and Abu Dhabi Investment Council is an arm of the Gulf kingdom.

In 2015, Swiss alternative investment firm Spice Private Equity put in money in Altico along with Clearwater and others as the company went aggressive in deploying capital.

Altico Capital has raised debt capital from a host of institutions including International Finance Corporation over the years.

In an attempt to re-energise the platform, Altico hired Sanjay Grewal as its chief executive officer in 2016 after its earlier head Karthik Athreya quit. Since Grewal's appointment, the company has pumped big bucks into the real estate markets.

The company said late last year it had deployed Rs 1,250 crore (nearly $195 million) across five deals in Hyderabad and Pune.

Its revenue jumped to Rs 951.8 crore for 2017-18 from Rs 588.2 crore the year before. Net profit climbed to Rs 355 crore from Rs 270.8 crore.

The company plans to deploy Rs 4,000-5,000 crore annually into the residential and commercial real estate sectors across Tier-1 cities in India. Since inception, it has deployed more than Rs 7,000 crore across more than 100 projects.

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