Multiples PE plans to enter stressed assets biz

Renuka Ramnath-led private equity firm Multiples Alternate Asset Management is looking to enter the stressed assets investment segment, sensing the potential in bad loans piling up in banks in the country, according to a report.

The Mint newspaper reported, citing Ramnath, that the firm has hired Sharad Bhatia, former CEO of Phoenix ARC, to run its soon-to-be launched stressed assets investment segment.

An alumnus of France-based INSEAD, Bhatia had in the past handled the stressed assets business for Axis Bank and Kotak Mahindra Group.

Multiples will be the newest entrant in the segment which has seen several global PE firms such as KKR and Co., Hong Kong-based SSG Capital Management and International Finance Corp. (IFC), the private-sector investment arm of the World Bank, acquiring stakes in existing asset reconstruction companies to buy bad loans.

The gross bad loans of 39 listed Indian banks rose 92% in fiscal year 2015-16 to Rs 5.79 trillion, the report said.

The PE firm is wrapping up the fundraising process for its second fund, raising more than what it was targeting to lap up the fifth-largest sector-agnostic private equity investment corpus ever raised for India.

The fund has two vehicles—the main fund with $550 million and the co-investment fund with $135 million. It was targeting to raise $500 million in its second outing.

With the closure of the second fund, Multiples has $1 billion of assets under management.

In 2011, it raised its debut $405 million fund in which Canada Pension Plan Investment Board, Dutch pension fund PGGM, the UK’s CDC Group and pension and sovereign funds from Europe and West Asia were the anchor investors.

Investments from the new fund include a follow-on investment in its portfolio company from the first fund PVR, India's largest multiplex chain operator. It has also invested in Mumbai-based housing finance firm Vastu Housing Finance Corp and contract development and manufacturing firm Encube Ethicals Pvt. Ltd.

Among exits, the fund marked its first full exit activity by selling its remaining stake in South Indian Bank in January 2015. Last year, it also exited Murugappa group's financial services firm Cholamandalam Investment & Finance Co Ltd.

Its other investments include trading exchange Indian Energy Exchange, logistics firms Delhivery and SSN Logistics, farm equipment manufacturer Milltec Machinery and healthcare firm Vikram Hospital.

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