The world’s biggest asset manager, BlackRock Inc., is in talks with billionaire Mukesh Ambani’s Jio Financial Services Ltd. to set up a private credit venture to take advantage of growing direct lending opportunities in India. According to sources familiar with the matter who are not permitted to speak publicly because the conversations were private, the joint venture would be a 50-50 partnership between the two companies and be available to businesses of every size, big and small—from corporate giants to startups.
The New York-based firm will partner with the conglomerate controlled by Asia’s richest individual in its third venture. The two companies had already teamed up earlier to establish an asset management business and a stock broking venture in India, thereby making them even more viable as a joint venture within the financial space.
India has emerged as a vibrant market for private credit in Asia and, thereby, become attractive to firms like Apollo Global Management, Cerberus Capital Management LP, and Varde Partners, all of whom want to tap into the rapidly increasing funding needs of local businesses. According to an EY report, private credit investments in India soared to a record high of $6 billion in the first half of this year, reflecting the truly immense growth potential of the region.
Notably, the final decision on the joint venture hasn’t been taken, and both companies can still decide not to continue it. No comments have been given on the discussion from the representatives of BlackRock and Jio Financial.
The global private credit market, at $1.7 trillion and growing since the financial crisis, has prompted lenders like Blackstone Inc. to look for growth opportunities in markets such as India. According to Celia Yan, head of APAC private credit at BlackRock, much bigger lending opportunities lie open before India, mostly large enterprises with multiple subsidiaries and young entrepreneurs funding startups, she said last month.
Jio Financial, run by veteran banker K.V. Kamath, operates a shadow bank that offers home mortgages and loans against investments in mutual funds. BlackRock recently hired Maheshwar Nataraj to run private credit in India; this puts the company in a good place to tap the deepening financial sector in the nation.
