State Bank of India (SBI) and Brookfield Asset Management Inc will form a joint venture (JV) to drive investment into stressed assets. While Brookfield has committed Rs 7,000 crore, India’s largest lender would chip in with Rs 350 crore as initial investment. The latter would also commit to earmarking five per cent of its total investments for stressed assets.
SBI has said it has signed a pact with Brookfield to collaborate on investments as part of an ongoing stress asset resolution process. The proposed JV will independently evaluate and invest in various stressed assets, and will rely on Brookfield’s operational expertise to manage recapitalised businesses. The JV, which will be registered with the Securities and Exchange Board of India as an alternate investment fund, will be a sector-agnostic fund with a life span of seven years. However, with substantial exposure to infrastructure-sector projects, some extension of fund life is not ruled out, says a senior SBI executive.