MUMBAI, India, April 6, 2011 /PRNewswire/ -- Eight Capital, India's premier foreign credit house, is launching a Mezzanine Income Fund to provide capital to high growth companies in India. The fund will be headed by Ravi Chachra, the founder and CIO of Eight Capital, who expects the fund to generate equity like returns with an income stream in the mid-teens, while also providing the downside protection of a debt fund.
Chachra believes India's high-yield market is in early stages of explosive growth, as it offers global investors an unbeatable combination of high interest rates along with equity exposure in India's rapidly growing mid cap companies. India's corporate credit market offers some of the highest credit spreads for healthy growth companies, making the Indian mezzanine market one of the best investment opportunities in the credit world today.
The fund will target companies where the mezzanine finance will produce enormous operating leverage that will boost free cash flows, thus increasing earnings and equity valuations of the companies.
Eight Capital is targeting an AUM of $250MM, with the goal of delivering a target IRR of 20% to its LPs over the five year life of the fund. The investment manager has a 10 person team in Mumbai, which has successfully deployed over $500MM over the last five years in its first fund, generating a 20% IRR for its LPs.
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SOURCE Eight Capital