The FINANCIAL -- IFC, a member of the World Bank Group, the IFC Financial Institutions Growth Fund and the IFC Emerging Asia Fund, two funds managed by IFC Asset Management Company (AMC), are investing up to $65 million in Altus Special Situations Asia 1 LP.
The investment will support distressed companies in East Asia’s emerging markets with financing to ensure they can meet their financial obligations, regain creditworthiness, and preserve jobs, thereby contributing to sustainable growth.
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.
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. 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. With this investment, IFC and AMC seek to support this growing and attractive market for investors.
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 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.