Brescon plans to raise $250-300 million for an AIF

Debt restructuring firm Brescon & Allied Partners LLP (Brescon) is in talks with domestic as well as global investors to raise around $250-300 million (nearly Rs 1,875-2,250 crore) as part of an Alternative Investment Fund (AIF). Nirmal Gangwal, Managing Partner of Brescon, in a company statement said, “We aim to do total deals worth Rs 2,500- Rs 3,000 crore, targeting around 4-6 transactions in the current calendar year."

Gangwal believes that local capital markets could become more mature and increasingly larger over the next five years and emphasised that the focus of the Insolvency Resolution Process should be to attract domestic capital to create new investors.

Vishal Prakash, Partner and Head of Structured Credit & Recapitalization Funding at Brescon, stated, “The fund, largely a category II AIF that will explore deals of around Rs 500 crore (approximately $67 million) each, could be a mix of providing financing to either special situations in distressed or growth companies, structured credit, recapitalisation funding or a mix of all of it.”

Prakash added, “We plan to raise our own AIF with at least $250-300 million fund size and it could be larger. We are working on the strategy, objective and mandate of the fund. We are in early discussions with LPs (limited partners), domestic and part global and other wealth managers.”

Prakash, who joined the firm in May last year, further stated that besides the appetite of the LPs, Brescon will associate with some domestic partners to come in and “invest on a club basis on a day-to-day basis” like a co-investor.

Brescon is also in talks to close a deal for investing $150 million, which could be through the AIF or the recent strategic partnership with Singapore-based investment management firm Broad Peak Advisors.

Broad Peak and Brescon & Allied Partners LLP, In November 2021, had said they have entered into an arrangement under which the former plans to invest up to $300 million (over Rs 2,235 crore) in special situations in India.

In addition to this, Brescon is also evaluating the option of getting capital from Gangwal’s family office, the statement said. The commitment is likely to be around 5-10 per cent of equity or around $10-13 million (Rs 75-100 crore), it added.

Brescon will evaluate the fund by taking into account the new framework on Special Situation Funds announced recently by market regulator SEBI.

Over the past few years, two large transactions worth $500 million (approx Rs 3,500 crore) involving Jayaswal Neco Industries and Panacea Biotec have been executed by the turnaround advisory firm. In 2016, Brescon had tied up with billionaire Ajay Piramal-led Piramal Enterprises Ltd to float a Rs 6,000 crore fund.