Boutique investment bank O3 Capital is in talks with sovereign funds and family offices in the US and Europe to raise a $300-million credit fund to enter the Indian lending space.
The fund, which will tap mid-market companies in the country, will also see participation from domestic backers and family offices. O3 expects to close fundraising for the credit fund before March 2020, and will make disbursements of about Rs 100-200 crore per deal.
O3 Capital already owns an NBFC licence, and will run the credit business under the NBFC arm, the report said. The investment bank has also hired Tashwinder Singh, former director of KKR India, as MD & CEO, credit strategies, it added.
“There’s a lot of interest for India from global investors. Although there is a liquidity crisis, fundamentally the economy is growing, and we believe that this is the right time to start the lending business in India,” the report said quoting Singh.
Indian markets have remained volatile this year amid an economic slowdown and credit crunch. As a result, others players, too, are looking at the credit opportunity.
IIFL Asset Management Co. Ltd, a part of the wealth management business of IIFL Group, plans to raise at least $500 million for its maiden structured credit fund, Mint reported last month. Financial services focused Edelweiss Group is eyeing the first close of its latest alternative investment fund, Edelweiss Special Opportunities Fund (ESOF) III, at $600-700 million by December-January.
Private equity firm Everstone Capital is planning to launch a dedicated credit vehicle with a focus on the Indian real estate sector as early as next year, DealStreetAsia reported in September. Meanwhile, Centrum Alternative Investment Managers Ltd has achieved the first close of its maiden structured credit fund at Rs155 crore, said another Mint report.
Founded in 2007 by Shyam Shenthar, Deepesh Garg, Shiraz Bugwadia and Srinivas Tekal, O3 Capital entered the asset management business in 2016. It also operates an early-stage fund called Uniqorn Venture Fund, which has invested in startups across online retail, fintech, healthtech, and foodtech. Some of its notable investments include Chillr, Bewakoof and VelvetCase.
O3 Capital is also an independent sponsor and has invested about $85 million in firms such as Bazaar Kolkata.