Private Equity: Apollo Global Management Splits With ICICI Venture
Apollo Global Management is splitting away from its long-time joint venture partner ICICI Venture, a unit of ICICI Bank (IBN). Apollo will be starting its own credit investment business in India. Apollos will stop adding capital to the venture, Aion Capital Partners, and begin to look for opportunities to invest in credit opportunities independently.
Apollo Global Management and ICI
Apollo first opened an office in India in 2008. In 2011 they formed a partnership with ICI Bank. The two agreed to change the relationship starting in April. Current investments will be wound up over the next few years. In the meantime, both Apollo and ICIC Bank are free to pursue opportunities on their own.
The decision to split comes at a time when India is considering changes to its distressed debt laws. Right now, the most common way of investing in these markets is by investing in what is known as security receipts issued against non-performing loans acquired by debt aggregation vehicles. India is considering a new category of alternate investment funds which will focus on acquiring stressed assets from banks and shadow lenders.
The coronavirus has hard hit the Indian economy. One of the obstacles Prime Minister Narendra Modi has in getting the economy turned around is clearing out the number of bad loans in India’s banking system. Changing the provisions of the distressed debt investing laws would allow banks to sell the debt directly to a much larger pool of foreign investment firms like Apollo.
Apollo will be able to get more actively involved in distressed debt markets in the country if that decision is made. Distressed debt is a crucial part of Apollo’s playbook, and we have seen them be very active in these markets since the pandemic hit the world economy.
Apollo remains firmly committed to the Indian markets and plans to continue investing in its private equity and credit funds.
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