Swiss alternate investment firm Spice Private Equity has made its debut investment in India, co-investing along with Clearwater Capital Partners and others in Mumbai-based non-banking finance company Altico Capital India Pvt Ltd.
Altico was created by Clearwater Capital, an Asia-focused international special situations investment advisory firm that does both PE-style equity deals as well as debt transactions. Early this year its NBFC arm Clearwater Capital Partners India Pvt Ltd was renamed Altico Capital.
VCCircle had first reported this development in April, as also the fact that Altico had roped in other external investors.
Spice Private Equity, listed on the SIX Swiss Exchange and focused on emerging markets, said in a statement that it has committed $10 million in Altico. It added that co-investors include Minneapolis-based multi-billion dollar global alternative investment firm Värde Partners and the Abu Dhabi Investment Council.
Altico's focus is on making senior secured loans in the real estate sector while retaining the flexibility to invest across multiple strategies.
NBFCs have taken an increasing role in filling the credit void created by traditional Indian banks in the financing landscape. Many have attracted PE funding over the past few years and some PE firms have also set up their own NBFCs.
The PE arm of Goldman Sachs, Ashmore Group Plc and Everstone Capital set up Indostar Capital Finance Pvt Ltd to lend to Indian firms. Early this year, private equity firm KKR established an NBFC that will provide structured credit solutions to real estate firms in India, with investment from GIC, Singapore's sovereign wealth fund. KKR also has a separate NBFC in the country.
Other PE-backed or controlled NBFCs are Capital First (Warburg Pincus), Magma Fincorp (KKR, IVFA, IFC, Leapfrog) and AU Financiers (ChrysCap, Warburg Pincus, IFC).
Spice PE is managed by GP Advisors, part of the GP Investments Group. It is an investor in several emerging markets-focused PE funds such as Carlyle Sub-Saharan Africa Fund, Helios Fund III, Navis Asia Fund VII and Baring Asia Fund VI.
It has also made direct investments in companies. Apart from Altico, the PE firm has directly co-invested in China’s online game developer and operator Giant Interactive and Africa Oil Corporation.
This is part of a wider industry trend where global Limited Partners or institutional investors in PE and hedge funds have looked at co-investment opportunities in India as also other markets. This tends to bring potential direct upside from investments without additional management fee that LPs pay to the PE fund managers for investing on their behalf. It also provides a more hands-on involvement in an investee firm through both direct and indirect investment.
The investment in Altico gives it more financial muscle. Founded in 2001, Clearwater Capital Partners invests in credit and special situations across Asia and has invested more than $4 billion in Asia. It manages about $1.5 billion of assets across six funds.Clearwater's NBFC Altico raises funding from Spice PE, others.