CX Partners is pondering the launch of a special situations fund with a “credit orientation”, an industry source told PE Asia.
He noted that the vehicle was not a mezzanine fund in the traditional sense, but would focus on “distressed situations where help is needed on the debt side”.
Elaborating on the strategy, the source said the fund would incorporate elements of private equity and strategies used by non banking financial companies (NBFC). The fund would likely target $400 million to $500 million in commitments, but remains in planning stages.
Stagnation of India's public markets, long considered the main source of growth capital for Indian businesses, is steering businesses toward alternate sources of funding, and some capital providers have begun to diversify their offerings to fill the gap.
Goldman Sachs, Ashmore Group and Everstone Capital Management earlier this year announced the joint formation of an NBFC, called Indostar Capital Finance, which will cater to the credit needs of large Indian businesses.
In April, Eight Capital announced plans to launch a mezzanine fund targeting $250 million. The hedge fund manager said that a combination of high interest rates and equity exposure in India's rapidly growing mid-cap companies made the sector an attractive area for global investors.