Apollo and ICICI head to first close

The India-focused distressed fund is two weeks away from a first close, highlighting the increased interest in the country's distressed market.

AION, the joint venture between Apollo Global Management and ICICI Venture, the private equity arm of ICICI Bank, is expected to make a first close on its distressed fund in the coming weeks, a market source told PE Asia.

The amount of capital raised so far was not disclosed. However, the fund, which was originally targeting $1 billion, is likely to raise closer to $750 million on its final close, said the source. 

The distressed product was launched in April 2011 to tackle special situation and distressed assets in India. Kalpesh Kikani, senior general manager of ICICI Bank, moved to ICICI Venture as managing director and senior partner on the advisory board to head the operation.

Apollo and ICICI are among a number of firms raising funds for the distressed asset class in India. CX Partners, Eight Capital, and EW India Special Assets are currently operating in the market. Edelweiss Capital has also reportedly launched a distressed fund for the country.

Apollo declined to comment and ICICI could not be reached.

Apollo recently announced its performance for Q1 2012, with assets under management growing to $86 billion as of 31 March 2012 from $70 billion the same time last year, according to the firm. Its private equity Fund VII generated a net IRR of 25 percent since its inception in 2008. Fund VI, which began investing in 2006 generated a net IRR of 9 percent up to 31 March 2012.

The firm’s investments last year included an INR13.05 billion (€201.3million; $292 million) investment in Indian pipe manufacturer Welspun and a reported $100 million investment in shipping and courier firm, Gati.