Private credit is increasingly moving from the margins of alternative investing to a more mainstream allocation for limited partners seeking yield, portfolio diversification and downside-defined opportunities.
That was a key theme at the LP Summit 2026 in Mumbai, where Dr. Amit Goenka, Chairman and Managing Director of Nisus Finance Services Co. Ltd., joined a panel moderated by Ajay Ramnathan, Special Correspondent, VCCircle, on how LPs are approaching private credit and specialty opportunities in India.
Why private credit is drawing LP interest
Dr. Goenka described private credit as a large and fast-growing market, both globally and in India. “India has seen about two and a half billion dollars’ worth of transactions last year. The global market is estimated to be about $5.5 trillion by 2030, almost doubling, which implies over 20% CAGR growth globally, with much higher growth trajectory in India.” He said LP interest has increased alongside shifts in tax treatment and return expectations. Despite that shift, he noted that private credit continues to offer attractive outcomes on a risk-adjusted basis.
“Yields in public markets have traditionally been much lower compared to private credit, which has given almost two to two and a half times that. Even without tax arbitrage, post-tax returns on a risk-adjusted basis remain very attractive.” He also pointed to the growing scale of the asset class within alternatives. “The largest capital formation within AIF has been within private credit. We are talking of almost a Rs 13 lakh crore AIF space where private credit forms a very significant portion.”
The IBC opportunity and special situations
A major driver of private credit in India, according to Dr. Goenka, has been the evolution of the insolvency ecosystem.
“Almost Rs 29 lakh crore was to be resolved through the IBC process. We’ve seen half of that getting resolved, which means a significant portion still remains.” This unresolved pipeline continues to create opportunities, particularly in structured credit and special situations. He said this shift has expanded the role of private credit beyond standard lending.
“Solution capital provides the largest impetus for growth, not just standard lending, especially in the middle markets.” He added that faster resolution timelines could further strengthen the opportunity. “IBC has been one of the largest reasons that has invigorated this market. With timelines getting compressed again to less than a year, it becomes a very interesting proposition.”
Private credit as an allocation within alternatives
Dr. Goenka said allocations to private credit have increased as investors look for better real returns in a changing rate environment.
“Within the alternate space, this asset class has been finding greater favor, especially with compression of yields globally and the need for better risk-adjusted, inflation-adjusted returns.” He also positioned private credit as a relatively uncorrelated source of income. “Given the volatility in public markets and geopolitical scenarios, this becomes an uncorrelated outcome with a continuous stream of income and a well-defined risk parameter.”
LPs are becoming more selective
According to Dr. Goenka, LP behaviour has evolved significantly over time. “Credit markets have evolved over the last 15 years and this has now become squarely mainstream. The acceleration of interest has been most visible in the last three to five years.”
He contrasted this with earlier phases of the market. “Earlier it was a flavor of the season. Now it is a mature allocation with proper diligence and deep diving into the opportunity set.” He said LPs are now focused on specific aspects of manager quality and alignment. They are also evaluating track record and transparency more closely.
Why manager quality matters in credit
For Dr. Goenka, manager capability is central to outcomes in private credit. “This entire framework of risk management along with the ability to enforce and recover in difficult times is what differentiates managers.”
He emphasised the importance of experience across cycles. “When you have done credit investing over a decade and a half, you have seen multiple cycles including downturns like 2016-17 and black swan events like COVID. You know where the fault lines lie and how to manage them proactively.”
Private credit requires active management
Dr. Goenka also stressed that private credit cannot be treated as a passive strategy. He said continuous monitoring is essential to protecting capital. “You have to be 24x7 behind the borrower and the asset to ensure covenants remain intact and the security package does not get diluted over time.”
He cautioned that parts of the market have prioritised scale over discipline. “A lot of people have focused on AUM growth without active risk management or taking calls to recover capital. That leads to deterioration in portfolio quality.” He added that limited team bandwidth can further amplify this risk.
Regulation is strengthening the market
Dr. Goenka said the regulatory environment has become more robust in recent years. “Regulators have sharpened their oversight with quarterly compliance, NAV revaluation, scrutiny of deal types, diversification norms and related-party transactions. This was not the case a few years ago.”
He also highlighted the role of newer AIF regulations. “With guardrails like preventing evergreening and bringing in greater certification and professionalism, regulation is improving discipline in the market.” He said such developments, along with market events, help strengthen the ecosystem over time.
A market that demands discipline
Dr. Goenka cautioned that not all sectors or themes are suited for credit. For LPs, his message was clear: private credit offers attractive opportunities, but outcomes depend on disciplined underwriting, continuous monitoring and selecting managers with proven ability to navigate cycles.
About Nisus Finance Services Co. Ltd.
Nisus Finance Services Co. Ltd. (NiFCO) is an India-focused financial services firm founded in 2013, with a primary focus on urban infrastructure finance and private capital market transactions. The firm operates across fund and asset management, transaction advisory, and NBFC lending. Nisus follows a risk-managed investment approach with an emphasis on capital protection, structured credit, and special situation opportunities, particularly within real estate and urban infrastructure sectors.
Headquartered in India, the firm has expanded its presence through multiple investment vehicles, including real estate credit and special opportunities funds, along with operations in GIFT City and international markets such as Dubai. Since inception, Nisus has built a platform spanning investment management and advisory, working with institutional investors, family offices, and developers across a range of structured financing and asset-backed opportunities.
