Alternative asset manager Ares SSG (previously known as SSG Capital) has picked up a small stake in a mining company in possibly its third-biggest India equity investment ever.
The firm, which is known mainly for credit deals and special situation transactions in India, has invested in Vedanta Ltd. The deal was executed through secondary market transactions a few weeks ago, people familiar with the matter told The Capital Quest.
Ares SSG is believed to have invested around Rs 700-850 crore (US$96-117 million) as part of the deal. This would make this the third-biggest equity investment for Ares SSG in India, behind Altico Capital and Cox & Kings arm Prometheon.
Vedanta is the third addition to Ares SSG’s India portfolio after it acquired troubled lender Altico and invested in Carlyle-backed mortgage lender PNB Housing Finance Ltd over the last one year.
An email sent to Ares SSG on the rationale for picking up a stake in Vedanta did not elicit any response till the time of publishing this article.
Vedanta, controlled by commodity billionaire Anil Agarwal, is a globally diversified natural resources company with interests in zinc, lead, silver, iron ore, steel, copper, aluminium, power, and oil and gas.
The firm also houses assets like Cairn India Holdings and aluminium producer Balco. It generated sales of $3 billion and operating profit of over $1 billion for the third quarter ended December 31, 2020.
The company’s stock price has tripled from the lows it hit in the market bloodbath last March. Ares SSG is believed to be sitting on a 30-50% upside already on its investment in Vedanta.
Ares SSG was formed when New York-listed Ares Management Corp bought a controlling stake in Hong Kong-based alternative asset manager SSG Capital as part of a game plan to grow its operations in Asia.
SSG Capital was set up by former Lehman Brothers executives Edwin Wong, Shyam Maheshwari and Andreas Vourloumis in 2009. Ares completed the acquisition of SSG Capital in July last year and rebranded it as Ares SSG.
At the time, the New York firm said that Ares SSG had about $6.1 billion in assets under management as of March 2020. It had more than 70 employees and over 120 direct institutional investors as of March 31, 2020.