Edelweiss Alternate Asset Advisors (EAAA), the distressed assets arm of investment bank Edelweiss Capital, is looking to raise $200-million, which can be expanded upto $400 million depending on the investor demand, The Economic Times has reported.
Edelweiss is in the process of applying to the Reserve Bank of India for an asset reconstruction company (ARC) licence. It is working on the structuring of the fund and propses to set up a special purpose vehicle over the next 6-9 months, the report said. The company recently hired Siby Antony from IDBI as executive VP and head-distress investments at Edelweiss.
The report quotes Antony as saying that they “should have everything in place by December”. The fund will not look at retail NPAs, but SMEs and large corporates.
There are more joining the distressed funds bandwagon. Kotak Mahindra Bank, which had recently received its ARC licence from RBI, may set up a distressed asset fund.
There are many other foreign distressed funds investing in India such as Clearwater, ADM, WL Ross, Spinnaker Capital, DE Shaw, Eight Capital and Avenue Capital. WL Ross, run by turnaround expert Wilbur Ross, tied up with HDFC to form a fund to invest in restructurings and turnarounds. WL Ross recently provided support worth $80 million to India’s low cost carrier SpiceJet.
There are also ARCs like ARCIL, UTI-led ASREC, IFCI-promoted Assets Care Enterprise (ACE), Dhir & Dhir, International Asset Reconstruction Company (IARC) and Pegasus Asset Reconstruction Company.