Sector developments and company hires

Indian MSE ABS fund debuts
Vivriti Asset Management has launched Vivriti India Retail Asset Fund (VIRAF), a first-of-a-kind ABS fund in India. The fund aims to strengthen the country’s securitisation market and address gender gaps in formal finance, while expanding additional financing for micro and small enterprises (MSEs).

The IFC has invested US$30m in VIRAF, which is backed by a capital commitment of US$75m from M&G Catalyst, a global private assets strategy within M&G Investment. The fund will focus on scaling investment in securitised debt securities with MSE-backed assets - predominantly microloans to MSEs - which will constitute about 90% of the portfolio.

VIRAF has a fund term of 10 years and a target AUM of US$250m.

India's 63 million micro, small and medium enterprises (MSMEs) contribute up to 30% of GDP, generating over 40% of exports and creating employment for over 100 million people. Yet, an IFC study estimates the MSME finance gap in India is US$342bn, with MSEs accounting for 95% of that gap. IFC's investment will help financial institutions offload existing MSME loans while unlocking capital to support MSME growth.

Further, the financing gap for women-owned MSMEs is estimated at US$158bn, equivalent to about 49% of the total MSME finance gap in India. Addressing this challenge, the project is designed to cater to the needs of WMSEs, with at least 45% of the fund's proceeds earmarked for them.

In other news…

EMEA
Paul Wilden has joined NPL Markets as senior advisor, as the firm shifts to the next level of its development and embraces new opportunities in the performing and non-performing loan markets. Wilden’s global capital markets career spans approximately 30 years across the APAC and EMEA regions. He was most recently global head of capital markets at Apex Group, which he joined in January 2020, having previously worked at TMF Group, Standard Chartered, BNY Mellon, Barclays and Citi.

RenRe to acquire Validus Reinsurance
RenaissanceRe has entered into a definitive agreement with AIG, whereby RenaissanceRe will acquire AIG’s treaty reinsurance business, including Validus Reinsurance and its consolidated subsidiaries, AlphaCat Managers and its managed ILS funds, and all renewal rights to the Assumed Reinsurance Treaty Unit of Talbot (Validus Re). AIG has committed to deliver at closing US$2.1bn in unlevered shareholder’s equity to RenaissanceRe, with any excess to be retained by AIG. RenaissanceRe will pay approximately US$2.985bn in total consideration, including US$2.735bn of cash and US$250m of RenaissanceRe common shares.

As part of the transaction, AIG will retain 95% of the development on net reserves at closing. In addition, following the closing of the transaction, AIG expects to make substantial investments in RenaissanceRe’s Capital Partners business.

The agreement has been approved by RenaissanceRe’s board of directors. The transaction is expected to close in 4Q23 and is subject to customary closing conditions and regulatory approvals.