Avendus PE Investment Advisors, the asset management arm of Avendus Group, said Thursday it has marked the first close of its third private credit fund after raising half of its base target corpus.
The Mumbai-based asset manager, which set out to raise the Avendus Structured Credit Fund III (ASCF III) in January, has secured about Rs 1,000 crore in commitments to mark the first close of the vehicle. The fund has a target corpus of Rs 2,000 crore and a greenshoe option of an equal additional amount.
The firm has so far drawn about 15% of the capital commitments received, according to Anshul Jain, the executive director of Avendus Structured Credit Fund. It has also made its first investment from the vehicle, it said without disclosing any details about the transaction.
“ASCF III is seeing significant repeat participation from existing investors, along with commitments from several new investors comprising domestic HNIs (high-net-worth individuals) and family offices. The strong response underscores a high level of investor confidence in Avendus’ ability to deliver impactful outcomes in the performing credit space,” the firm said in a statement.
Avendus will focus on growth-stage companies with strong, differentiated business models from the new fund. It will make 12-18 transactions, with a ticket size of Rs 200-500 crore, throughout its six-year tenor, investing in operating companies and holding companies with portfolio-level internal rate of return (IRR) targeted in the 16-18% range. While nearly all the deals will be secured credit transactions, the fund manager may look at select hybrid structure transactions, which often provide a yield kicker at the portfolio level.
The fund is sector-agnostic, but its preferred sectors include pharmaceuticals, healthcare, manufacturing, consumer, chemicals, technology, and B2B businesses.
If Avendus does manage to fully exercise the overallotment option, the new fund would be nearly four times the size of the second vehicle. Avendus Structured Credit Fund II had a target corpus of Rs 1,000 crore and a greenshoe option of Rs 500 crore. It eventually raised Rs 1,055 crore. The firm’s first credit fund had raised Rs 135 crore.
The firm’s second credit fund has been fully committed across 14 transactions. This was the first fund where Avendus roped in institutional investors as limited partners to the fund.
For the latest fund, too, Avendus expects to rope in institutional LPs, especially insurance companies, while commitments from banks may be slow.
The firm had invested its maiden private credit fund across nine transactions. It has returned the capital raised with gross IRR of 18%, Avendus says.
