JM Financial Credit Alternatives, the alternative funds arm of JM Financial group has completed first close of its JM Financial Yield Enhancer (Distressed Opportunity) Fund I with commitments aggregating at Rs. 160 crore from HNIs, family offices and institutions.
JM Financial Yield Enhancer (Distressed Opportunity) Fund I is a category II AIF. Distressed funds, as the name suggests, invest in stressed assets of various companies, with the investment philosophy that not all NPAs are bad assets and a turnaround in these will provide good returns. The key to success of a distressed asset fund lies in buying good underlying assets at reasonable valuations, which have the potential for a turnaround.
In a press release, Mukund Kannappa, CIO, JM Financial Credit Alternatives said "The first close is extremely important to us as it demonstrates the confidence of the investors in our consistent strategy and credentials in reviving stressed assets. Our core investment strategy focuses on investing in enterprises that are going through various stages of stress at distress valuations as well as address the source of stress and help the enterprise revive and exit at fair market valuations.”
He further said, “The investment opportunities in distressed asset space in India are growing. We believe that distressed assets have become one of the most preferred asset classes for the domestic and global investors. The stressed asset funds follow the investment mandate of ploughing money into companies in financial distress and turning them around.”