Axis AMC, Inversion to raise Rs 3,500 crore buyout fund to invest in underperforming companies

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Axis Asset Management Company and Inversion Advisory Services on October 19 announced a partnership to invest in underperforming companies.

The two entities plan to jointly raise up to Rs 3,500 crore for the proposed new fund under its Alternative Investment Fund registration.

Axis AMC will be the investment manager of the fund, stated a press release, adding that an application has been filed with the Securities and Exchange Board of India (SEBI) seeking registration for the proposed fund.

"The Investment Manager will employ a team to evaluate potential opportunities. Inversion would provide management support to acquired companies with its team of functional and industry experts," it added.

The two entities aim to acquire controlling stake primarily in pre-stressed, stressed, distressed and other underperforming assets.

"They also seek to take advantage of the strong fund management expertise of Axis AMC and operational and turnaround expertise of Inversion to offer a unique platform for investors," the release added.

The partnership seeks to help fill the gaping shortage of high quality equity capital in the country’s stressed company ecosystem, which has seen a number of debt offerings but lacks strong equity investors with operational skill set, it further said.

On the initiative, Axis AMC MD & CEO Chandresh Nigam said, "With our entry into the exciting space of turnaround investing, we believe we have created a unique proposition for investors looking to participate and benefit from the India growth story."

Inversion Chairman Akhil Gupta said their combination with Axis AMC "is ideal to not just exploit large untapped potential in this space but also serve an important social purpose in saving large number of jobs and capital already invested by shareholders, lenders and vendors in such companies".

Axis Bank MD & CEO Amitabh Chaudhary lauded the entry of Axis AMC into the turnaround investing space. "The addition of this new capability will also take us forward on our path of creating a market leading alternatives platform within the AMC," he said.