International Finance Corporation (IFC), the private lending arm of the World Bank – has proposed to co-invest in distressed and special situations assets in Asia through the fifth-generation fund formed by Clearwater Capital Partners.
Clearwater Capital is an Asia-dedicated credit and special situations investment firm.
In a pre-investment disclosure, IFC said, it will invest a sum of $75 million in DARP SPV Clearwater 2 through its special purpose vehicle, the IFC Distressed Asset Recovery Program (DARP).
The fund will be invested in distressed and special situation assets of companies operating in emerging markets in Asia, including China, India, Indonesia, the Philippines, Thailand, and Vietnam.
The proposed transaction consists of up to $75 million facility to the Project SPV, in the form of up to $50 million senior debt and $25 million junior debt, with additional $75 million junior debt funded by Clearwater Fund V.
“Through the SPV, IFC will be channeling financing to local companies in distress, supporting them to meet their financial obligations, achieve sustainable growth and contribute to job creation and local economic stability,” the IFC said.
Clearwater Capital Partners will manage the assets under the special purpose vehicle.
IFC’s DARP focuses on the acquisition and resolution of distressed assets, the refinancing and roll-over risk of viable entities, and restructurings of small and medium-sized companies (SMEs).
“DARP is particularly critical as a means to reduce the effects of poverty in emerging markets by preventing the loss of assets (mainly family homes and productive assets) and access to formal credit, helping to preserve jobs,” the IFC said in its filing.
Since inception, IFC has invested $1.9 billion and mobilized $3.4 billion from investors in its distressed asset platform.
Established in 2001, Clearwater is privately owned and has offices in Mumbai, Chongqing, Seoul, Singapore and Hong Kong, each provide an important local presence that allows for in-house market research and direct engagement with market relationships through the entire region.
Clearwater comes with a 15-year strong investment track record through funds dedicated to distressed assets in Asia and as of today, the firm has approximately $1.3 billion of assets under management.