The BK Modi Group is all set to plunge into financial services. It has entered into a joint venture with Singapore based 3 Degrees Asset Management to start a special situations offshore private equity fund. CNBC TV-18's Sajeet Manghat and Sandeep Srikant report.
The BK Modi Group is definitely spicing things up, this time in the world of financial services. Spice Finance, the group's newly-launched finance arm, has entered into a joint venture with Singapore-based 3 Degrees Asset Management to start an offshore special situations private equity fund, with a USD 150 million kitty.
Says Moe Ibrahim, Founder and Managing Principal of the firm, “The seed capital will be USD 21 million. But the fund will be open to third party investors. Institutional investors from around the world, family offices, high networth individuals, fund of private equity funds, they will be welcome to invest alongside of the initial USD 21 million of capital and the fund size is envisioned to be circa USD 120-15 million.”
The fund will invest in distressed assets, turnaround stories and non-core assets of promoters and businesses under stress. The scope of the fund would be India and South-East Asia. 3 Degrees already has exposure in the region but will get a foothold in India through the venture.
3 Degrees has over USD 250 million in assets under investments and mainly focusses on distressed assets.
The Spice group, which has interests in telecom and technology, plans to use spice finance as a vehicle to diversify its interests.
Says Divya Modi, ED, Spice Finance, “We are looking at special situation investments. We are also going to be looking at over the counter exchanges and also remittances and other newer financial instruments particularly on the fixed income side where we are trying to look at new financial instruments that we can introduce into the market.”
For the venture, Spice Finance will be drawing on the expertise of a team of professionals, including former Securities and Exchange Board of India Chairman Dr Mehta and Rajnikant Patel, the Former CEO of the Bombay Stock Exchange. The team is expected to fall into place in a few months. Experts say the group's move makes sense, as it will give it a better position to leverage on future deals like the Satyam opportunity.
Source: Money Control