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Global Investors Can Be Disrupters in Special Situation Investments: Nirmal Gangwal, Managing Partner at Brescon & Allied Partners LLP

Nirmal Gangwal is the Managing Partner of Brescon & Allied Partners LLP, one of India’s leading institutional players in stressed assets advisory business for almost two decades. Gangwal talks about the impact of quality global investors in India's stressed advisory business with Ashish Sinha of BW Businessworld. Excerpts:

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What will disrupt the dynamics of special situations investments in India?
Investors with patient capital are showing active interest in exploring and leveraging special situations and stressed assets opportunities across sectors. The scale of special situations investing opportunities is growing in India. However, investors need to have in-depth knowledge of the local economy and its way of doing the business besides the regulatory landscape to make wise decisions. Hence, more strategic capital from established business houses as well their family offices will take active part in special situation investing, as they have the expertise to manage and navigate the local ecosystem. Their ability to bring in cost-effective funds for such investments will be a game changer. Other key disruptors in the special situations' investment space are global investors. Collaborating with domestic advisory firms, they can invest across several special situations such as turnaround, debt resolution, litigation financing, etc. Our strategic arrangement with Broad Peak which aims to bring in $300Mn in special situations in India is a prime example of global capital backing local knowledge.

Your perspective on emerging special situations investing markets in India.
Special situations investment funds have been making investments across sectors for gaining long-term capital appreciation. To make good deals out of special situation investments, funds pick companies in financial stress with potential to turn around. As the market is gradually maturing, it will become more competitive. In a competitive market scenario, transparency of data sharing becomes critical to mitigate the possibility of snapping up assets through side deals or cheaper deals.

How will the alliance with Broad Peak capitalize on opportunities across special situations investing domains?
As per our strategic arrangement with Broad Peak, we'll focus on investing along with strategic capital in stressed assets. The risk of running and managing of operation will be taken care of by the new management with a proven past track record. Our in-depth understanding of the stressed assets and track record of more than two decades will guide such funds to buy right assets with right valuations and more importantly advise them on what not to do while.

How will the alliance’s differentiated approach disrupt the industry as opposed to the conventional strategies adopted by the competitors?
Thanks to our incisive knowledge of the Indian regulatory landscape, we are well positioned to advise investors to channelize their strategic capital efficiently. Our experience can create a win-win situation for all stakeholders such as new investors, management, existing lenders of the company in financial stress. Our differentiated approach will alter the conventional special situation investment narrative.

Any plans to advise transactions or invest funds?
We'll work out the future strategy as we move forward with the strategic arrangement with Broad Peak. Our immediate goal is to enhance the scale of the business and agility with which special situations are identified, resolved, structured and funded. We'll announce our future course of action at an appropriate time.