B K Modi group has entered the private equity space. The Delhi-based business group promoted Spice Finance has entered into a joint venture with Singapore-based 3 Degrees Asset Management for launching a special situations private equity fund.
Spice Finance and 3 Degrees will together invest $21 million in the first tranch of the fund called Spice 3 Degrees Special Opportunities Fund. The fund is targeting $100 million at the final close.
The fund will invest in India and southeast Asia. It will target distressed assets, turnaround stories, recapitalisations and other opportunities that have become available due to turmoil in global financial markets. It will look at management control.
Spice Finance will invest Rs 500 crore in distressed assets and special situations, as well as other niche businesses such as remittances and over-the-counter exchanges. “Our strategic alliance with 3 Degrees is the first significant step in our goal to achieve a $1 billion valuation for Spice Finance within the next few years,” said Divya Modi, Executive Director of Spice Finance.
Founder of distressed specialist 3 Degrees Asset Management Moe Ibrahim has been quoted as saying in a news report in Business Standard: “Asia’s distressed asset market is highly inefficient, very large and growing rapidly. With over $2 trillion in opportunities and only a handful of sophisticated players, the Asian distressed asset market epitomises the inefficiencies we seek to exploit as a firm.”