One of the world’s biggest distressed debt investors eyes India’s $210 billion in bad debt

Oaktree seeks to lend directly to companies in India and also invest in bad debt portfolios, in sectors such as energy and infrastructure.

Oaktree Capital Group LLC, one of the world’s largest distressed debt investors, sees India as a key market as the country revises its bankruptcy rules and banks struggle with a historic cleanup of bad debts.

“I wouldn’t be surprised to see India as another engine of growth perhaps in the next three to five years,” Jay Wintrob, chief executive of the Los Angeles-based company, said in an interview in Hong Kong. . “We spend a lot of time in India, getting up to speed.”

India’s $210 billion pile of stressed assets and troubled borrowers has drawn global funds from Varde Partners to JC Flowers & Co. rules. A highly publicized default by Reliance Communications Ltd. is also proving a litmus test for how foreign creditors are treated.

Oaktree, which has about $100 billion in assets under management, has no onshore presence in India and currently invests a “very, very small amount” in the country, according to Wintrob.

Local partners

“We have yet to open our first Oaktree office in India. It’s something we considered,” Wintrob said. “I think we are looking to form one or more local partnerships.”

The distressed debt investor has seven offices in Asia, including those in Hong Kong, Singapore, Shanghai and Beijing. Wintrob said that “under the right circumstances” his company may open a physical office in India at some point.

Oaktree is following the limited number of insolvency proceedings in India and feels optimistic about the progress of those proceedings, Wintrob said. Potential ways to grow in the country could include setting up or investing in non-bank financial companies and Indian buyers of bad loans, or so-called asset reconstruction companies, he added.

The company seeks to lend directly to companies in India and also invest in bad debt portfolios, and looks into sectors such as energy and infrastructure, according to Wintrob. He declined to say whether Oaktree is watching the dirty dozen.


Carol M. Barragan