Exclusive: Avista Advisory prepares blueprint for debt fund business

May 26, 2017

Singapore-based investment banking advisory firm Avista Advisory Associates Pvt. Ltd is planning to launch a debt fund business to take advantage of the rising distressed asset opportunities in India, a top executive told VCCircle.

Avista’s business activities include arranging for funds and advising clients on mergers and acquisitions, and restructuring across industry verticals such as technology, media and telecom, consumer and retail, industrial, real estate, hospitality and infrastructure.

The firm has a partnership with US-based Houlihan Lokey Inc for its mid-market investment banking business in India. It also has a Southeast Asia-focused real estate asset management business.

“Debt management is a natural extension of our existing restructuring advisory business,” Rajiv Kochhar, founder and CEO, Avista, told VCCircle. The company is exploring various options and may launch two separate funds to provide flexibility to investors, he said.

“We have already been approached by several investors and raising a corpus of $300-500 million is easily doable,” he said. Avista may either launch a sector-agnostic debt fund, which will extend credit to distressed assets, or raise a fund with a focus on specific infrastructure sectors such as construction, hospitality, steel and power.

The third option would be more deal-focussed, where Avista would extend credit to a particular stressed company and then bring on board other investors. “Many of these companies require capital for last-mile financing to survive,” Kochhar said.

Avista will apply for a licence with the Securities and Exchange Board of India soon for a Category II Alternative Investment Fund, which includes debt funds. It may also decide to launch a non-banking finance company.

The company will be joining a growing list of asset managers, non-banking financial institutions and private equity firms to float a private debt fund.

Asset management units of Life Insurance Corporation of India and State Bank of India are also in the process of launching such funds. IDFC Alternatives, too, had told VCCircle that it would launch a debt fund.

Financial services group Edelweiss and alternative investment firms KKR and Baring Private Equity Asia are also looking to scoop up capital for similar funds.

Several private equity firms are also looking to pick up equity stakes in distressed companies.