Avendus PE Investment Advisors, an asset management arm of the KKR-backed Avendus Group, has raised over Rs 1,000 crore ($118 million) in the first close of its third private credit fund with a target corpus of Rs 2,000 crore.
The sector-agnostic Avendus Structured Credit Fund III (ASCF–III) was launched in January and has an additional greenshoe option of Rs 2,000 crore.
Avendus claims that ASCF III is seeing significant repeat participation from existing investors and commitments from several new investors comprising domestic HNIs and family offices.
The fund is focused on industries such as pharmaceuticals, healthcare, manufacturing, consumer, chemicals, technology, and B2B businesses, among others, and will primarily invest in secured credit transactions of both operating companies and holding companies, with select investments in hybrid structures based on specific deal requirements.
It plans to build a diversified portfolio of 12-18 investments, with ticket sizes ranging from Rs 200-500 crore, targeting gross portfolio IRRs of 16-18%.
As traditional equity financing tightens amid a volatile funding environment, many companies are increasingly attracting private credit.
Most recently, Dubai-based Synergy Capital, founded by former ArcelorMittal SA executive Sudhir Maheshwari, disclosed its plans to raise $1 billion for its third Asia-focused private credit fund, with a focus on India.
Last month, global investment manager Franklin Templeton Alternative Investments announced the first close of its debut credit-focused alternative investment fund (AIF) in India, securing over Rs 205 crore ($24 million) for Franklin India Credit AIF – Scheme I.
In the same month, private credit and real assets-focused investment firm Neo Asset Management achieved the first close of its second flagship private credit fund–the Neo Special Credit Opportunities Fund II (NSCOF II)–at $232.8 million (Rs 2,000 crore).
Separately, British International Investment, the UK’s development finance institution (DFI), is also actively exploring opportunities in private credit through investment in credit funds, Srini Nagarajan, Managing Director and Head of Asia at BII, told DealStreetAsia in an interview recently.
Avendus’s first private credit fund, which was launched in October 2017, was fully deployed across nine transactions and returned the full capital in June 2022, achieving a gross portfolio IRR of 18%. The second fund, which launched in January 2022, is fully deployed across 14 transactions, tracking an expected gross portfolio IRR of 17%, Avendus said in a statement.
Avendus is best known in India for advising large startups such as SoftBank-backed food delivery firm Swiggy and eyewear retailer Lenskart on their fundraising. Its portfolio includes Bikaji Foods, Delhivery, VerSe Innovation (Dailyhunt), Veritas Finance, FirstCry, Avanse Financial Services, and Xpressbees.
At least four of its portfolio companies–FirstCry, Avanse, Veritas Finance and Indigene–have disclosed plans to go public.
Avendus Group has a presence in investment banking, institutional equities, wealth management, credit solutions, and asset management. KKR had acquired a majority stake in Avendus Group in 2015.
