Avendus Finance Pvt. Ltd, the credit solutions arm of investment banking firm Avendus Capital Pvt. Ltd, has launched a Rs 250 crore (around $40 million) structured credit finance fund.
The fund is already registered with the Securities and Exchange Board of India (SEBI) as a category II Alternative Investment Fund, the firm said in a statement.
The company is targeting a corpus of Rs 250 crore with a green-shoe option of 250 crore. The minimum capital commitment will be Rs 1 crore, it said.
The fund will invest in instruments yielding mid-teens returns and will follow a sector-agnostic investment strategy, though it prefers sectors such that industrials, healthcare and consumer, the firm said.
“The fund will be a vehicle to provide customised solutions to top mid-market firms,” said Sandeep Thapliyal, managing director and CEO of Avendus Finance. Thapliyal will be managing the fund.
“It will co-invest in transactions along with Avendus Finance. As a standard in every transaction, the NBFC will have a minimum 20% share, providing additional comfort to investors,” Thapliyal said.
Other firms that have either launched or are floating structured credit platforms include Baring Private Equity Asia. The alternative asset management firm has set its eyes on building a credit platform that would provide debt capital to mid-market companies. It was in talks to acquire Religare Credit Advisors LLP, the private debt platform of Religare Global Asset Management, as it was planning to build the fresh line of business through the acquisition route.
Private equity giant Kohlberg Kravis Roberts & Co Ltd told VCCircle earlier this year that it is targeting a mid-to-high teens multiple in returns for its structured credit business.
VCCircle also reported earlier this year that Edelweiss Group had floated a debt fund to augment its private credit business. Reliance AIF Asset Management Company Ltd, Bain Capital and Avista Group are also raising similar funds to tap into growing demand for debt capital.