* Bad debt manager says assets up 11 percent in six months

* Profit jumped over a third in first half of 2013

* Up to $2.5 bln IPO set to be Hong Kong's biggest this year

HONG KONG, Nov 25 (Reuters) - China Cinda Asset Management Co Ltd, one of China's four bad debt managers, set out a steady increase in assets and profits in a prospectus published on Monday for an initial public offering worth up to $2.5 billion.

The offering is set to be the biggest in Hong Kong this year as global investors bet that soured loans will be a growth business in China. It opens a window into how the four firms have managed loans, investments and properties seized from companies unable to repay their lenders as the world's second-largest economy slowed.

Cinda, the first of the four to launch an IPO, said in a filing to the Hong Kong Stock Exchange that total assets rose 11 percent to 283.55 billion yuan ($46.5 billion) as of June 30, compared to the end of December last year.

The next Chinese bad debt manager expected to pursue an IPO is Huarong Asset Management Corp, which hopes to raise up to $2 billion through a listing though no timetable has been set. Reuters reported the Huarong IPO plans in June.

Created in 1999 to handle the bad loans of China Construction Bank, the country's No. 2 lender, Cinda said profit attributable to equity holders was 4.06 billion yuan ($667 million) for the six months ended June 30, 2013, up 36 percent from 2.99 billion yuan a year earlier.

In its IPO Cinda is offering 5.32 billion new shares in an indicative range of HK$3.00 to HK$3.58 ($0.39 to $0.46) each.

A group of 10 investors, including Norway's sovereign wealth fund and Och-Ziff Capital Management Group LLC, have together committed to buy about $1.1 billion of stock as cornerstone investors, Reuters reported on Sunday.

Other investors include Temasek Holdings unit Farallon Capital Management and Oaktree Capital Group LLC .

Demand for the IPO is driven in part by the view that China's financial system is set for an increase in non-performing loans as the economy's slowdown continues. That increases the need for the services provided by Cinda and the country's other three bad debt management firms.

Highlighting growth in the volume of bad debt, Cinda said in its prospectus that impairment losses on assets jumped 264.8 percent to 3.5 billion yuan in the six-month period ended June 30 compared with a year earlier.

But it said its cost-to-income ratio fell to 24.3 percent for the six months ended June 30, 2013, down from 30.8 percent as of the end of December, 2010.