Singapore-based 3 Degrees Asset Management and Spice Finance, the financial services arm of India’s BK Modi Group, have teamed up to launch the Spice 3 Degrees Special Opportunities Fund.
Spice Finance and 3 Degrees will commit $21 million to the fund, which expects to hold a first close in June, Moe Ibrahim, founder of 3 Degrees, said in an interview. The fund is targeting a final close on $100 million within 12 months of its first close, he added. Indian billionaire BK Modi will chair the fund.
The India- and Southeast Asia-focused fund will target distressed assets, turnarounds, recapitalisations and other opportunities stemming from the financial crisis. The sector agnostic fund will make control investments and aims to obtain board and management control at the time of the transaction.
Competition is negligible due to the relationship-intensive nature of the opportunity set.
In addition to the fund’s capital, it has access to parallel investment vehicles and partners, which enable it to consider deals as small as $2 million to deals that are more than $100 million, Moe Ibrahim, founder of 3 Degrees, said in an interview. 3 Degrees has made distressed private equity investments through its Asian Debt Fund. It also manages 3DPropCo, a distressed real estate-focused private equity fund.
The Asian distressed asset market has more than $2 trillion in opportunities and “only a handful of sophisticated players,” Ibrahim said. “Although the market is enormous, competition is negligible due to the relationship intensive nature of the opportunity set,” he added.
Spice Finance intends to invest INR5 billion ($106 million; €75 million) in distressed assets, special situations and businesses such as remittances and over-the-counter exchanges, Divya Modi, executive director of Spice Finance, said in a statment.
Spice Finance is part of the BK Modi-owned Spice Group, which provides products and services to India’s information technology, automation and telecommunications sectors. In addition to Spice Finance, its other business units include Spice Televentures, Spice Enfotainment and Spice Innovative Technologies.
Founded in 2002, 3 Degrees provides financial services such as asset management, wealth management and advisory services to institutional and high net worth clients.