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How KKR's big bet on India credit became a cautionary tale for investors Rocked by the shadow-banking crisis in India, KKR's local credit unit lost $207 million in the final nine months of 2019, wiping out nearly 40 per cent of its capital
Few asset managers have enjoyed more success in the riskier corners of credit than KKR & Co. But after a decade-long attempt to wring big returns from India, the Wall Street titan has become a cautionary tale for investors in one of the world’s most tantalising emerging markets. Rocked by the shadow-banking crisis that began rippling through KKR India’s financial system 2 1/2 years ago, KKR’s local credit unit lost Rs 1,516 crore ($207 million) in the final nine months of
2019, wiping out nearly 40 per cent of its capital. While the unit posted a small profit last year as India’s central bank pumped record amounts of cash into the Covid-battered economy, KKR is now in the process of merging the business with a competitor. graphIt’s a steep fall from grace for a venture that extended about $800 million of loans at its peak and at one point seemed poised to deliver a windfall to KKR in the form of an initial public offering. By late 2019, just before the pandemic plunged India into its worst recession on record, KKR had determined that more than half the loans at the unit -- called KKR India Financial Services Ltd. -- were at risk of default..