Olympus branches into Asia's credit business(2)

The Asia-focused private equity firm has moved into the lending business to provide non-private equity financing for mid-size companies, following similar moves by KKR and Adamas.

Olympus Capital Partners Asia has launched a structured lending business targeting mid-sized corporations in Asia, according to Daniel Mintz, founding managing director of Olympus Capital.

Olympus Capital Asia Credit is based in Singapore and will provide loans of between $20 million and $100 million to mid-size companies in Southeast Asia, India and Australia that either cannot get enough funding from banks or want alternatives to private equity financing, according to a company statement.
Mintz told Private Equity International that new banking regulations such as Basel III have made lending to mid-size companies in Asia fairly unattractive for banks and even hedge funds, even though many of these companies show strong growth,

OCA Credit hopes to fill these underserved markets, he said.

“Our prototype investment is a company that’s growing and has a chance to acquire another company or business, but finds that for one reason or another bank financing is limited,” Mintz said. OCA Credit may look at distressed companies selectively, but Mintz does not believe they comprise the majority of the opportunity in this sector.

In its private equity business, Olympus has encountered plenty of entrepreneurs that don’t feel comfortable with the commitments of private equity, and simply want to take the money and pay it back in a short time, Mintz added.

Olympus Capital has invested an undisclosed, “significant” amount in the business from Olympus Capital Asia III, which is now majority invested, according to Mintz. 

The private equity arm will have a majority stake in the credit business, but OCA Credit will have a separate deal team. 

Olympus has also hired Nitish Agarwal from Barclays and Gary Stead from Australia-focused structured credit fund Shearwater Capital to lead OCA Credit. Agarwal will be based in Singapore, while Stead will lead the Australia operations from Sydney.

The creation of OCA Credit also marks the opening of Olympus Capital’s Singapore office, which will support Olympus’ private equity investments in Southeast Asia as well as house OCA Credit’s operations, according to the statement.

Olympus is not the only private equity firm interested in lending. Kohlberg Kravis Roberts, for example, opened a lending branch in India, Mintz added, and PEI reported earlier that Gen2 Partners rebranded as Adamas Asset Management in order to focus solely on mezzanine lending in China.