Avendus PE Investment Advisors, an asset management arm of Avendus Group, aims to raise as much as Rs 1,000 crore ($133 million) for a new credit fund.
The target amount for the Avendus Structured Credit Fund II includes a green shoe option of Rs 500 crore, the firm said in a statement.
The new alternative investment fund is a sector-agnostic vehicle focused on the performing credit space. It will provide structured credit to high-quality, growth-oriented companies with differentiated business models. The fund plans to invest in secured transactions of operating companies as well as holding companies.
“It has become increasingly evident that the conventional pool of debt is not able to meet the increasing demand for structured credit in India,” said Nilesh Dhedhi, fund manager for the Avendus Structured Credit Fund.
“Through the new fund, we continue to increase our footprint in the credit investment space and strengthen our investment strategy to provide structured credit solutions to larger businesses while generating superior risk adjusted returns for our investors,” he said.
Avendus Group is a Mumbai-based financial services provider that counts private equity firm KKR as its main investor. It was set up in 1999 and has a presence in 10 cities across India, the US, the UK and Singapore. In 2015, KKR picked up a controlling stake in Avendus for an undisclosed amount.
In August this year, Avendus hit the first close of a late-stage fund called Avendus Future Leaders Fund II that aims to raise as much as Rs 1,250 crore ($168 million).
The company’s credit platform comprises the structured funds and non-banking unit Avendus Finance. It says the platform has invested a total of Rs 3,000 crore across more than 50 transactions over the last five years.
The firm had launched its first structured credit fund in 2017 with an aim to raise Rs 500 crore. This fund invested in nine transactions. It has so far fully exited five companies and partially exited two more. It has returned more than 100% capital back on a cash-on-cash basis with a portfolio level gross internal rate of return of 17.5-18%, Avendus said.