A distressed fund is a special fund that invests in companies that are in financial distress. Normally, such fund pick up companies that are deep in financial stress either due to a sharp fall in revenues or due to high debt. Such companies are bought by the distressed fund at deep discounts with a view to hive off at a future date at a neat profit. Recently, Carlyle Group signed an agreement with SBICAP Ventures to float its maiden India-focused distressed asset fund and is expected to raise up to $1.5 billion. This fund will exclusively look at distressed deals in India with both SBI and Carlyle putting gin Rs.1000 crore each. Carlyle has been looking at investment opportunities in India’s distressed assets space to capitalize on the opportunities in India. This fund will not only look at SBI’s stressed assets, but will also invest in any stressed case where turnaround is possible in stressed corporate loans. This is one space where investors are seeing huge potential in the coming days.