Wednesday, June 23

Cerberus Capital to set up India office, hires ex.AION executive

MUMBAI: Global private equity and distress assets investor Cerberus Capital is set to enter India as it seeks to tap the mounting opportunities in domestic stress assets space. Cerberus is in the process of setting up its office in Mumbai with senior-level hirings.

For its India operations, Cerberus has hired Indranil Ghosh as managing director. Ghosh, former principal at special situation fund AION Capital Partners, will spearhead Cerberus’ investments in private equity and stressed assets, said two people aware of the development.

He is expected to join in the first quarter of next calendar year.

Founded in 1992, Cerberus has assets under management (AUM) of over $35 billion across credit, private equity and real estate verticals. In Asia, Cerberus has offices in Hong Kong, Singapore, Beijing and Tokyo. Cerberus has more than 650 professionals working from 14 offices around the world.

Ghosh, spokespersons at Cerberus and AION declined to comment.

As the regulations for buying stressed assets has been improved after passing of the Insolvency and Bankruptcy Code (IBC) two years ago, a number of global distressed funds are actively pursuing opportunities to set up offices or strengthening their positions in India. A handful of senior-level hiring for India operations have been taken place in recent past.

Recently, New York-based private equity fund Lone Star hired Ambrish Singh, former director of Global Credit & Special Situations Group, at Merrill Lynch, who was responsible for the distressed debt and special situation business in India and South East Asia.

Hong-Kong-based firm Pacific Alliance Group (PAG) has also shortlisted candidates to for its dedicated team to start India operations, said the sources. PAG, one of Asia’s largest independent alternative investment management groups with more than $20 billion in capital under management, has presence across Hong Kong, Shanghai, Beijing, Shenzhen, Tokyo, Singapore, Sydney and Seoul.

“With the implementation of IBC, global funds have gained a lot of comfort in looking into the distressed opportunities in India. This coupled with increasing liquidity shortage has created a big opportunity for more global firms to enter India,” said Anshul Lodha, director at recruitment agency Michael Page India. “We have seen many global players like Lonestar, Varde Partners, Cerberus Capital, Oak Tree and others looking to set up offices and have a dedicated investment team to build out their India AUM.”

While India has had a fair share of stressed assets at regular intervals, investors have largely stayed away from the space, amid the absence of robust legal, regulatory and resolution frameworks. The Insolvency and Bankruptcy Code has given stressed asset resolutions a legal structure, well-defined processes, responsibilities and timelines, said a recent report from Avendus.

While global players are waiting to see how the new frameworks play out, domestic players have already started working actively in the space to acquire assets at discounted prices, it added.

RBI has come up with two lists which target a total of Rs 4.06 lakh crore of the total Rs 8.77 lakh crore of outstanding non-performing loans (NPLs). The first list includes 12 companies with gross NPLs of Rs 2.77 lakh crore, while the second list consists of 25 companies with gross NPLs of Rs 1.28 lakh crore.

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