Emso to invest in India’s stressed assets
London-headquartered emerging markets hedge fund Emso Asset Management Ltd, which manages $5.8 billion in assets worldwide, is entering India’s growing corporate restructuring market.
Mumbai-based distressed assets investor Eight Capital Management LLC, which was co-founded in 2005 by former Deutsche Bank and JP Morgan executive Ravi Chachra, will be its local partner.
An Emso spokesperson said that the partnership will target the $140 billion stressed assets undergoing insolvency proceedings under India’s insolvency and bankruptcy code.
One person familiar with the development said that the partnership will target 10-15 transactions in the distressed assets space with deal sizes up to $50 million.
Eight Capital was one of the early entrants in India’s distressed assets space. Its first fund, Eight Capital Special Situations and Distressed Fund, was launched in January 2006, seeded by JP Morgan, to address the pent-up demand for high-yield capital from Indian companies with an objective to provide investors superior equity-like returns, while providing a cushion on downside risk.
The fund targeted viable distressed assets or healthy assets trading at distressed prices, including convertible bonds and restructured equities issued by Indian companies. Since inception, the fund has deployed over $500 million in credit and distressed investment opportunities in India across more than 11 listed and unlisted Indian companies.
Its second fund, Eight Capital India Recovery Fund, plans to acquire 10-15 asset-rich companies with revenues of $150-300 million, and Ebitda margins of 10-20 per cent.