International Finance Corporation (IFC), a member of the World Bank Group, has proposed a $40-million investment in the latest India-focused credit fund of Baring Private Equity Asia (BPEA), according to its latest disclosure.
Baring PE Asia, the global alternative investment major, is seeking to raise $500 million in capital commitments for BPEA Credit – India Fund III. The fund will invest predominantly in senior debt instruments of corporates that are based in or have substantial operations in India.
The launch of the third India credit fund followed the close of Fund II in 2019, which raised $225 million.
On its website, the firm said BPEA Credit is part of the Baring Asia platform.
BPEA Credit is exclusively focused on India due to the critical need of private lenders to provide debt capital to businesses that are otherwise unable to access debt to grow, the firm added.
“We understand that mid-market companies often have profitable track records, established brands, strong market positions, and excellent growth prospects, but have very limited access to capital to facilitate growth. We seek to provide flexible credit solutions to these companies,” according to BPEA.
The firm added that the most recent fund managed by BPEA Credit has extended 21 loans to businesses and has resulted in almost half of the fund being distributed back to its investors within the first two years of its life.
In the disclosure, IFC said the new fund will increase access to credit for mid-market companies in India and improve access to credit for mid-market companies with a presence in the country’s low-income states.
Last year, BPEA reached the final closing of its seventh private equity fund at the hard cap of $6.5 billion. The Baring Asia Private Equity Fund VII, launched in 2019, exceeded its target by $1 billion and is over 60% larger than the predecessor fund, Baring Asia Private Equity Fund VI.
Formed in 1997, BPEA is one of Asia’s largest private equity investment houses with a total committed capital of over $20 billion. The company runs a private equity programme for buyouts and investments in companies with operations in the Asia Pacific region.