The investment will be conducted in East Asia’s emerging markets with financing to ensure distressed companies can meet their financial obligations, regain creditworthiness, and preserve jobs, thereby contributing to sustainable growth.
Altus Special Situations Asia 1 LP (Altus) is the special situation fund of Philippine-headquartered investment firm Altus Capital Partners.
The investment will enable Altus to set up a regional facility to invest in the Philippines, Thailand, Indonesia, and Vietnam, the latter two being nascent markets for distressed asset recovery.
Through its global Distressed Assets Recovery Program (DARP), IFC works with partners to build regional platforms across emerging markets and catalyze other institutional investors to invest in distressed assets.
Companies in the region face challenges, despite strong economic growth. In some markets, following the global financial crisis, loan defaults among highly leveraged corporations have increased, and a ballooning of non-performing loans (NPLs) has locked in banking capital. As a result, financially distressed companies are unable to obtain credit to restore viability and rebuild their operations.
“We welcome Altus playing a dynamic role as both a hands-on investor and an asset manager within this growing region, actively assisting to unlock value in viable but underperforming middle-market companies, as well as in hard assets in need of redevelopment and repositioning," said Altus Capital’s CEO Pavan Gidwani.
Altus Special Situations Asia 1 LP will have up to $272.5 million of deployable capital. IFC, IFC Financial Institutions Growth Fund, and IFC Emerging Asia Fund will be contributing up to $15 million, $25 million, and $25 million, respectively. Altus Capital Corporation will contribute $7.5 million.
“IFC’s support is likely to promote greater market integration for distressed asset resolution through the creation of a regional platform. This will mobilize much needed regional and international capital for distressed companies to make them viable again,” said Vivek Pathak, IFC Director for East Asia and Pacific.
He added that subsequently, these companies can plan for long-term, sustainable growth that increases job opportunities, driving economic growth in the region.
IFC has worked with Altus—an existing DARP partner—since 2012. As of March 2018, IFC DARP has deployed over $5.5 billion focused on distressed assets globally. In Asia, IFC DARP’s active projects include IFC commitments of approximately $525 million and co-investments of approximately $560 million.