Private equity firm Samena Capital Investments Ltd is looking to merge its Indian credit business with homegrown private credit investment manager Catalytic Management Advisors Pvt. Ltd.
Samena Capital, which services Asian, West Asian and North African markets, had floated an India-focused debt fund in 2013. According to its website, Samena India Credit Fund was started with a seed capital of $45 million. Subsequently, the PE firm had infused another $70 million.
Delhi-based Catalytic, which is launching a secured high-yield credit fund, was founded by former Goldman Sachs and Asiabridge Capital employees Siddharth Bhargava and Amit Khosla, along with two more partners.
Earlier in the day, Mint cited anonymous sources saying that Samena Capital is in the process of exiting the four Indian investments worth $50 million it had made from its offshore fund. It is expected to use the proceeds to anchor a local alternative investment fund, tentatively named SC India Credit Opportunities Fund.
The financial daily went on to say that the new fund will be a five-year, close-ended private credit fund that will target the mid-market structured credit segment. The fund aims to raise $200 million and is expected to close within the next 18 months. However, approval from the Securities and Exchange Board of India, which regulates AIFs in India, is still awaited, the report added.
Email queries to Samena Capital and Catalytic did not elicit any immediate response.
Catalytic is also in process of raising an offshore fund for co-investing in secured credit in India, said its website.
Samena Capital will own 49% stake in the merged entity, while Catalyst will control 51%. Both firms have committed $25 million, each, towards the initial corpus and plans to raise the rest from domestic and foreign investors, the report added.
Samena Capital is also in the process of raising $700 million for its third private equity fund, and has already raised $350 million. It plans to close the special situations fund within 18 months.
The third fund will focus on investments in India, Myanmar, Indonesia, Vietnam, Sri Lanka and China as it sees challenges in West Asia due to low oil prices.
Samena Capital’s first investment in India was in commercial vehicles company Eicher Motors in 2009. Its other investments include RAK Ceramics PSC, Jubilant Industries Ltd, Dynamatic Technologies Ltd, Voltamp Transformers Ltd and Mahindra Two Wheelers.
Several private equity players have been active in the structured credit investing space. KKR entered the structured credit segment in India in 2009. Since then it has provided $3.7 billion to 85 companies. It had also entered the mid-market lending business as an extension of its credit platform.
Baring Private Equity Asia also has plans to build a credit platform that would provide debt capital to mid-market companies.
The asset management arm of State Bank of India is also finalising its plans to float a private debt fund that would also take exposure to mid-market companies.