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Altus Special Situations Asia 1 LP, a special situation investment platform set up by Altus Capital Corporation (a specialist investor and asset manager that focuses on Special Situation and Distressed Assets investments across Southeast Asia), has secured $65 million from IFC, a member of the World Bank Group, and its two funds managed by IFC Asset Management Company (AMC): IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund.
The investment, according to IFC, is targeted at supporting distressed companies in East Asia’s emerging markets with financing to ensure they can meet their financial obligations, regain creditworthiness, and preserve jobs, thereby contributing to sustainable growth.
Altus Capital Corporation, meanwhile, is managed by US-based Altus Capital Partners, which is known for investing in middle market manufacturing businesses in the US for returns.
Companies in the region face challenges, despite strong economic growth. In some markets, following the global financial crisis, loan defaults among highly leveraged corporations have increased, and a ballooning of non-performing loans (NPLs) has locked in banking capital. As a result, financially distressed companies are unable to obtain credit to restore viability and rebuild their operations.
|Altus Capital will co-operate with two IFC funds to give a helping hand to Southeast Asian companies. Source: Shuttlestock|
Through its global Distressed Assets Recovery Programme (DARP), IFC works with partners to build regional platforms across emerging markets and catalyse other institutional investors to invest in distressed assets. The investment will enable Altus to set up a regional facility to invest in the Philippines, Thailand, Indonesia, and Vietnam, the latter two being nascent markets for distressed asset recovery. With this investment, IFC and AMC seek to support this growing and attractive market for investors.
“I am excited to embark on this next phase of Altus Capital’s expansion with our partners at IFC, AMC, and other institutional investors,” said Pavan Gidwani, Altus Capital’s CEO.
He added, “We welcome Altus playing a dynamic role as both a hands-on investor and an asset manager within this growing region, actively assisting to unlock value in viable, but underperforming middle-market companies, as well as in hard assets in need of redevelopment and repositioning. Our track record provides many documented successful turnaround stories in various sectors and markets, all with high social and development impact. We are fully committed to build upon that continuing legacy with our new fund.”
Altus Special Situations Asia 1 LP will have up to $272.5 million of deployable capital. IFC, IFC Financial Institutions Growth Fund, and IFC Emerging Asia Fund will contribute up to $15 million, $25 million, and $25 million, respectively. Altus Capital Corporation will contribute $7.5 million.
“IFC’s support is likely to promote greater market integration for distressed asset resolution through the creation of a regional platform. This will mobilise much-needed regional and international capital for distressed companies to make them viable again,” said Vivek Pathak, IFC Director for East Asia and Pacific, adding that, “Subsequently, these companies can plan for long-term, sustainable growth that increases job opportunities, driving economic growth in the region.”
“IFC Financial Institutions Growth Fund and IFC Emerging Asia Fund are pleased to invest in Altus, which will provide much-needed capital and expertise for companies in the region that have been struggling to perform. In doing so, the funds see an opportunity to enhance this impact and create good financial returns for our investors,” noted Marcos Brujis, CEO of IFC Asset Management Company.
IFC has been working with Altus – a DARP partner – since 2012. As of March 2018, IFC DARP has deployed over $5.5 billion focused on distressed assets globally. In Asia, IFC DARP’s active projects include IFC commitments of approximately $525 million and co-investments of approximately $560 million.
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