JM Financial Credit Alternatives, the credit alternatives arm of JM Financial Group, has raised ₹160 crore in the first close for its distressed opportunity fund. The total size of the fund is ₹500 crore.
The fund will invest to build a portfolio with downside protection, the company said in a statement.
The fund — JM Financial Yield Enhancer (Distressed Opportunity) Fund I — is a Category II AIF, and was set up in July 2019. It is a sector-agnostic fund with its core investment strategy aligned with the macro-economic scenario.
“The first close is extremely important to us, as it demonstrates the confidence of the investors in our consistent strategy and credentials in reviving stressed assets. Our core investment strategy focusses on investing in enterprises that are going through various stages of stress at distress valuations as well as address the source of stress and help the enterprise revive and exit at fair market valuations,” Mukund Kannappan, Chief Investment Officer at JM Financial Credit AIF, said.
READ THE STORY: Financial stress in industry would be blessing for alternative capital, asset investors
“The investment opportunities in distressed asset space in India are growing. We believe that distressed assets have become one of the most preferred asset classes for the domestic and global investors. The stressed asset funds follow the investment mandate of ploughing money into companies in financial distress and turning them around,” he added.
The current stress in the industry, due to the Covid-19 pandemic, nearly ₹4-lakh crore of new slippages into non-performing assets of banks expected this fiscal, would emerge as an opportunity for alternative capital and asset investors to make contra-cyclical investments.