Spice Finance and Singapore-based 3 Degrees Asset Management to unveil Special Situations Private Equity Fund

Spice Finance, the financial services arm of the US$ 1.5 billion B. K. Modi Group, has entered into a first-of-its-kind strategic joint venture with Singapore-based 3 Degrees Asset Management to unveil the Spice 3 Degrees Special Opportunities Fund. This fund will be chaired by Dr Modi, who has an impeccable track record of entrepreneurship and turnaround management expertise. The fund will hold a first closing of US$ 21 million comprised of commitments from Spice and 3 Degrees. A final closing will be held once third party commitments reach US$ 100 million.

This first-of-its-kind fund will invest in distressed assets and special situations spanning India and Southeast Asia. The fund will leverage the specialized skills of Asia’s leading distressed debt manager along with the management turnaround expertise of one of Asia’s best-known entrepreneurs. This unprecedented opportunity will allow institutional and high net worth investors the chance to invest alongside one of Asia’s leading tycoons.

The Spice 3 Degrees Special Opportunities Fund will target distressed assets, turnaround stories, recapitalizations as well as a myriad of other attractive opportunities that have become available as a result of the turmoil in global financial markets. The investment objective is to generate long-term capital growth from a diversified portfolio of debt and private equity investments. The fund will focus on control-oriented investments, where board as well as management control can be achieved at the time of the investment.

“Spice Finance will invest Rs. 500 crore in distressed assets and special situations, as well as other niche businesses such as remittances and over-the-counter exchanges. Our strategic alliance with 3 Degrees is the first significant step in our goal to achieve a US$ 1 billion valuation for Spice Finance within the next few years,” said Divya Modi, Executive Director of Spice Finance.

“Asia’s distressed asset market is highly inefficient, very large and growing rapidly,” said Moe Ibrahim, Founder of distressed specialist 3 Degrees. “With over US$2 trillion in opportunities and only a handful of sophisticated players, the Asian distressed asset market epitomizes the inefficiencies we seek to exploit as a firm. Although the market is enormous, competition is negligible due to the relationship intensive nature of the opportunity set.”

The Spice 3 Degrees Special Opportunities Fund will target companies whose shareholders are struggling or where the debt holders are foreclosing. “We will focus on companies with excellent long-term growth prospects, but where short-term liquidity and management issues have caused the company to fail. Spice has a 30 years rich history of using technology and training in turning around troubled companies. We have the business acumen and resources to make companies successful,” said Divya Modi.

“The Spice 3 Degrees joint venture will leverage the vast relationships and turnaround management resources of Spice, along with the deal sourcing and execution capabilities of 3 Degrees,” said Moe Ibrahim. “The synergies this joint venture will unlock are likely to result in exceptional returns for our investors. The ability to invest alongside one of Asia’s serial entrepreneurs is an unprecedented and limited opportunity for institutional and high net worth investors.”

Spice has an impressive 30-year history of being technology pioneers, bringing several first-time products and services in IT, automation and telecommunications to the Indian market. Spice’s diversified business interests are categorized under four verticals: Spice Televentures, Spice Enfotainment, Spice Finance and Spice Innovative Technologies.

3 Degrees is a leading Singapore-based investment management firm. The firm’s core disciplines in distressed debt and turnaround management have led it to be widely recognized as Asia’s preeminent distressed assets manager. 3 Degrees offers an array of specialized financial services to high net worth and institutional clients, including asset management, wealth management and advisory services.