Spice Finance, the financial services arm of B. K.
Spice Finance, the financial services arm of B. K. Modi Group, has entered into a joint venture with Singapore-based 3 Degrees Asset Management to launch the Spice 3 Degrees Special Opportunities Fund.
The fund will hold a first closing of USD21m comprised of commitments from Spice and 3 Degrees. A final closing will be held once third party commitments reach USD100m.
The fund will invest in distressed assets and special situations spanning India and Southeast Asia. It will target distressed assets, turnaround stories, recapitalizations as well as other attractive opportunities that have become available as a result of the turmoil in global financial markets.
The investment objective is to generate long-term capital growth from a diversified portfolio of debt and private equity investments.
The fund will focus on control-oriented investments, where board as well as management control can be achieved at the time of the investment.
‘Spice Finance will invest INR500 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 USD1bn valuation for Spice Finance within the next few years,’ says Divya Modi, executive director of Spice Finance.
‘Asia’s distressed asset market is highly inefficient, very large and growing rapidly,’ says Moe Ibrahim, founder of 3 Degrees (pictured). ‘With over USD2trn in opportunities and only a handful of sophisticated players, the Asian distressed asset market epitomizes the inefficiencies we seek to exploit as a firm. Although the market is enormous, competition is negligible due to the relationship intensive nature of the opportunity set.’
The fund will target companies whose shareholders are struggling or where the debt holders are foreclosing.
