Elham Credit Partners, the recently established corporate credit arm of global investment firm Hillhouse Investment Management, has launched operations in Australia with the recruitment of a local managing partner Vincent Ling, formerly of Intermediate Capital Group.
Based in Singapore, Elham is seeking to establish a diversified corporate private credit operation across the Asia-Pacific region.
The business is led by partner and co-head Siddhartha Hari, former head of financing for the north Asia and Pacific region at Deutsche Bank, and managing director Srinivasulu Yanamandra, formerly North Asia head of loans and leveraged finance for Barclays Bank.
Currently directly financed by Hillhouse, Elham has arranged its first few deals across the region, including one in Australia. The business is now raising its first fund which it hopes to close in 2024. Industry sources say the fund is targeting $US1-$US1.5 billion.
Yanamandra said Elham was intended to be complimentary to the private equity operations of Hillhouse and was able to draw on market knowledge and connections of the private equity investment team. The business would focus on stable developed markets across the Asia-Pacific region, a strategy that should appeal to international institutional investors.
Elham planned to balance its exposures across the region taking into account different leading areas of demand country-to-country and varying economic conditions in individual markets over time. Team members’ local experience would be important in achieving this balance.
Yanamandra anticipated that Australia would account for 20-25% of investment from the first fund.
Ling expects most of the Australian investments will initially be in sponsor-led deals, contrasting with India where the strongest demand comes from direct business deals. Over time, however, he expects the number of Australian businesses directly seeking private credit will increase substantially.
The private corporate debt market had grown strongly over the last ten years, Ling said, as Basle III rules compliance had resulted in major banks reducing their exposure to the corporate credit sector.
New local private debt providers had emerged, along with debt funding advisory firms, but this had been in response to market growth. Opportunities continued to increase especially for providers able to offer flexible debt packages structured for specific business needs rather than those that took a ‘cookie cutter’ approach to the market.
Image: Elham Credit managing partner for Australia, Vincent Ling.