Hedge fund manager Eight Capital is setting its sights on India’s subordinated debt markets with plans to launch a mezzanine fund targeting $250 million, the firm said in a statement.
The fund will be headed by Eight Capital chief investment officer Ravi Chachra and will back high growth companies in India. The mezzanine fund will be the firm’s debut vehicle outside the hedge fund space, according to the company's website. Eight Capital currently manages Eight Capital Master Fund, an India-focused distressed and special situations hedge fund launched in January 2006.
The firm could not be reached for comment at press time.
According to the statement, Chachra believes India's high-yield market has latent growth potential, while a combination of high interest rates and equity exposure in India's rapidly growing mid cap companies make the space an attractive area for global investors. India's corporate credit market offers some of the highest credit spreads for healthy growth companies, making the Indian mezzanine market one of the best investment opportunities in the credit world today, the statement added.
Mezzanine investing in Asia is still at its burgeoning stages, Partners Group vice president of private debt at Alexander Ott told PE Asia earlier this year.
“Generally speaking, there has not been an Asian mezzanine standard yet, just because the buyout market is relatively young and mezzanine as we define it for buyouts consequently is also a very young market,” Ott said. Partners Group has witnessed “a lot of interest from sophisticated investors,” he added. “I think they are catching up fast here, and that’s something we expect to continue”.
Eight Capital has a 10 person team in Mumbai and has deployed over $500 million over the last five years from its hedge fund. The firm also has an office in New York.