DBS invests in Asia Pacific private debt fund to open doors to new growth opportunities arising from the pandemic
Overview of the InvestmentDBS is expected to anchor up to USD 200 million or 40% of the total fund size, whichever is lower. Alongside DBS’ commitment, DBS will have representation on the Fund’s Investment Committee and Advisory Committee.
Background on Muzinich APAC Private Debt Fund
Muzinich APAC Private Debt Fund is focused on private debt solutions targeted at lower middle-market companies2 and is managed by Muzinich and Co., a privately-owned international investment firm with total assets under management (AUM) amounting to USD 39.3 billion.
The Fund’s objectives are to:
- Generate high recurring cash income with capital appreciation potential while minimising credit impairments;
- Build a diversified portfolio across geographies and industries; and
- Incorporate an Environmental, Social and Governance (ESG) conscious approach towards investments.
DBS’ Investment Rationale
The Investment will offer DBS the following strategic benefits:
- Provides growth exposure to recovery opportunities in APAC, which is one of the world’s fastest growing regions; APAC GDP is growing at 4.8% per annum vs 1.5% in Europe and 2.1% in North America3;
- Extend and diversify credit risk participation beyond DBS’ traditional debt portfolio;
- More active involvement in the fund activities (i.e. through participation in the Fund’s Investment and Advisory Committees) to build up product know-how in the special situations space;
- ESG-focused investment approach aligns with DBS’ focus to support corporates in adopting sustainable financing.
Piyush Gupta, CEO of DBS said, “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. 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.”
1 Special situation opportunities refer to companies that may face temporary operational or financial stress, but have a healthy core that is perceived to be of investment value. The Fund’s investment particular focus is on middle-market companies that may be facing such a scenario.
2 Targeting corporate, family and financial sponsor owned companies with EBITDA range: US$5m to US$50m with an operating history of three years or more with audited financials.
3 IMF, World Economic Outlook Database, Gross Domestic Product (GDP), April 2020.
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 12 consecutive years from 2009 to 2020.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.