ALSO READClearwater Capital is investing more than China in Indian distressed debt Bidders for stressed assets want fair treatment for all creditors Global distressed-debt funds circle China again, eye $256 bn bad-loans mkt Bain & Piramal to launch $1-bn fund to acquire stressed assets in India Insolvency resolution: Top 5 steel firms need to pay Rs 29,000 cr to bid
Oaktree Capital Group LLC, one of the world’s largest distressed debt investors, is eyeing India as a key market as the nation overhauls its bankruptcy rules and banks battle with a historic bad debt clean-up.
“I wouldn’t be surprised to see India as another engine of growth maybe in the next three to five years,” said Jay Wintrob, chief executive officer at the Los Angeles-based firm, in an interview in Hong Kong. “We are spending a lot of time in India, getting up to speed.”
India’s $210 billion pile of stressed assets and distressed borrowers have attracted global funds from Varde Partners to JC Flowers & Co. The nation’s so-called dirty dozen -- 12 large debtors that have been ordered to go through the bankruptcy courts -- are testing the country’s insolvency rules. A high-profile default by Reliance Communications Ltd. is also proving a litmus test for how foreign creditors get treated.
Oaktree, which has about $100 billion of assets under management, doesn’t have an onshore presence in India, and currently invests a “very, very small amount” in the nation, according to Wintrob.
“We have yet to open our first Oaktree office in India. That’s something we have considered,” said Wintrob. “I think we are looking to form one or more local partnerships.”
The distressed debt investor has seven offices in Asia, including ones in Hong Kong, Singapore, Shanghai and Beijing. Wintrob said that “under the right circumstances,” his firm may open a physical office in India at some point.
Oaktree is following the limited number of insolvency proceedings in India and feels optimistic about how those proceedings are going, said Wintrob. Potential ways to expand in the nation could include setting up or investing in non-banking financial companies and India’s bad loan buyers, or so-called asset-reconstruction companies, he added.
The firm is looking to lend directly to companies in India and also invest in bad loan portfolios, and is looking at sectors including energy and infrastructure, according to Wintrob. He declined to say whether Oaktree is looking at the dirty dozen.