DBS has on June 17 announced that it will become an anchor investor in a special situations private debt fund managed by US credit fund Muzinich and Co.
DBS will anchor up to US$200 million ($265.74 million) of the Muzinich Asia Pacific (APAC) Private Debt I fund. The bank will also have a seat on the fund’s investment advisory committees.
The fund targets lower middle-market companies, with the objectives of generating income with capital appreciation whilst simultaneously minimizing credit impairments, building a diversified portfolio, and incorporating an environmental, social, and governance (ESG)-conscious approach towards investments.
DBS says the investment is in line with its strategy of investing in new opportunities created by the pandemic.
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Additionally, DBS will have exposure to recovery opportunities in the fast-growing APAC region. The bank will also be able to diversify credit risk and gain greater knowledge on product know-how in the special situations space. DBS also notes that the fund’s ESG-driven approach is in line with its own sustainability focus.
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“The special situations space is already well-established in the US and Europe. But in the Asia Pacific, there is still room for further penetration, especially now, when more compelling opportunities arise in Asia as it gradually recovers from the pandemic,” says Piyush Gupta, CEO of DBS.
"This fund can play an integral role in bridging the financing gap faced by businesses that have been dislocated by the disruptions, complemented by our already established Fixed Income franchise in deal sourcing and meeting more bespoke funding and investment needs across Asia,” he adds.
As at 12.32pm, shares in DBS are down 2 cents or 0.07% lower at $29.90.
Photo: DBS
