Key Takeaways
- • Institutional investors accounted for 22-25% of the ₹6,200 crore corpus of Neo Alternative Asset Managers' second special credit opportunities fund, up from 1-2% in its first fund, according to the firm.
- • Ascertis Credit's fourth private credit fund crossed $700 million (around ₹6,500 crore) in commitments in October, drawing existing and new insurers and development finance institutions.
- • Neo expects gross returns of 21-23% from its planned 35-40 investments averaging ₹250-300 crore, focused on collateral-backed lending to firms with established operating cash flows.
- • Annual investment opportunities in the Indian private credit market are estimated at nearly ₹1 lakh crore, roughly double the ~₹50,000 crore level three years ago, with reported transactions near $7 billion in the first nine months of the year.
Summary
Institutional investors are increasing allocations to private credit funds in India, with insurance companies, pension funds and development finance institutions (DFIs) becoming key contributors to new fundraising, according to The Economic Times.
Neo Alternative Asset Managers said institutional investors accounted for 22-25% of the ₹6,200 crore corpus of its second special credit opportunities fund, compared with 1-2% in its first fund. Chief executive Hemant Daga said domestic insurance companies form a large part of the institutional pool, and the fund also received commitments from overseas pension funds.
Ascertis Credit's fourth fund crossed $700 million (around ₹6,500 crore) in commitments in October. The firm said it attracted both existing and new institutional investors, including insurance companies and development finance institutions. In a statement, Ascertis said the reception reflected increasing institutional interest in performing private credit strategies as investors seek resilient income-generating investments away from market volatility, with attractive risk-adjusted returns.
The article notes that institutional investors are increasingly evaluating private credit separately from private equity and venture capital, placing greater focus on the risk, returns and track record of individual credit funds.
Neo is targeting 35-40 investments with an average size of ₹250-300 crore and expects gross returns of 21-23%. The strategy centers on collateral-backed lending to businesses with established operating cash flows, with about 95% of transactions involving operating firms. Daga estimated annual investment opportunities at nearly ₹1 lakh crore, double the roughly ₹50,000 crore level of three years ago, and said reported transactions were nearly $7 billion in the first nine months of the year.
Neo Alternative Asset Managers said institutional investors accounted for 22-25% of the ₹6,200 crore corpus of its second special credit opportunities fund, compared with 1-2% in its first fund. Chief executive Hemant Daga said domestic insurance companies form a large part of the institutional pool, and the fund also received commitments from overseas pension funds.
Ascertis Credit's fourth fund crossed $700 million (around ₹6,500 crore) in commitments in October. The firm said it attracted both existing and new institutional investors, including insurance companies and development finance institutions. In a statement, Ascertis said the reception reflected increasing institutional interest in performing private credit strategies as investors seek resilient income-generating investments away from market volatility, with attractive risk-adjusted returns.
The article notes that institutional investors are increasingly evaluating private credit separately from private equity and venture capital, placing greater focus on the risk, returns and track record of individual credit funds.
Neo is targeting 35-40 investments with an average size of ₹250-300 crore and expects gross returns of 21-23%. The strategy centers on collateral-backed lending to businesses with established operating cash flows, with about 95% of transactions involving operating firms. Daga estimated annual investment opportunities at nearly ₹1 lakh crore, double the roughly ₹50,000 crore level of three years ago, and said reported transactions were nearly $7 billion in the first nine months of the year.
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