Key Takeaways
- • Northern Arc Investment Managers Private Limited, the asset management subsidiary of Northern Arc Capital Limited, announced the first close of its Northern Arc Diversified Debt Fund with commitments exceeding Rs. 400 crore from institutions, family offices, UHNIs and HNIs.
- • The sector-agnostic Category II AIF targets a corpus of Rs. 1,500 crore plus a Rs. 500 crore greenshoe, for a potential total of Rs. 2,000 crore, with a five-year tenure and a 16% XIRR target.
- • The fund is rated AA (SO) by CareEdge Ratings and is the manager's 15th private credit fund.
- • The announcement coincided with the maturity of Northern Arc India Impact Fund, which deployed gross capital of over Rs. 1,398 crore across 60 businesses in India.
- • Northern Arc Capital reported Q2FY27 consolidated PAT of Rs. 129 crore (up 41% YoY), NII of Rs. 425 crore (up 32% YoY) and lending AUM of Rs. 19,003 crore (up 34% YoY).
Summary
Northern Arc Investment Managers Private Limited, the asset management arm of Northern Arc Capital Limited, has announced the first close of the Northern Arc Diversified Debt Fund, with commitments exceeding Rs. 400 crore. Investors include institutions, family offices, ultra-high-net-worth individuals and high-net-worth individuals, according to a press release distributed by NewsVoir and carried by ANI.
The fund is the manager's 15th private credit vehicle and is structured as a sector-agnostic Category II Alternative Investment Fund focused on performing private credit opportunities. It is rated AA (SO) by CareEdge Ratings. The fund targets a corpus of Rs. 1,500 crore, with an additional Rs. 500 crore greenshoe option that would take its potential size to Rs. 2,000 crore. The tenure is five years and the target return is 16% XIRR. The release notes that target returns are not assured.
The announcement coincided with the maturity of the Northern Arc India Impact Fund, which channelled global capital into financial inclusion opportunities in India. Over its tenure, the fund supported 60 businesses across credit cycles, with gross deployment of over Rs. 1,398 crore at fund level. Its backers included UHNIs, family offices, and domestic and global institutional investors. Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital, said the first close reflects continued investor interest in private credit as a strategic allocation.
According to the company, Northern Arc has launched 15 funds since its inception in 2014, seven of which have fully matured with a weighted average XIRR above 14.5%, without extensions or principal loss to investors. It has cumulatively distributed over Rs. 10,000 crore of principal and coupon. Across the past decade, the platform has deployed over Rs. 16,500 crore across 15 AIFs and two PMS offerings and serves more than 1,500 investors.
In its Q2FY27 results, Northern Arc Capital reported consolidated PAT of Rs. 129 crore, up 41% YoY, and NII of Rs. 425 crore, up 32% YoY. Lending AUM rose 34% YoY to Rs. 19,003 crore, with direct lending AUM up 64% to Rs. 12,502 crore, now 66% of the portfolio. Credit costs improved by 11 bps YoY to 2.66%. All figures are stated as of September 30, 2026, per the release.
The fund is the manager's 15th private credit vehicle and is structured as a sector-agnostic Category II Alternative Investment Fund focused on performing private credit opportunities. It is rated AA (SO) by CareEdge Ratings. The fund targets a corpus of Rs. 1,500 crore, with an additional Rs. 500 crore greenshoe option that would take its potential size to Rs. 2,000 crore. The tenure is five years and the target return is 16% XIRR. The release notes that target returns are not assured.
The announcement coincided with the maturity of the Northern Arc India Impact Fund, which channelled global capital into financial inclusion opportunities in India. Over its tenure, the fund supported 60 businesses across credit cycles, with gross deployment of over Rs. 1,398 crore at fund level. Its backers included UHNIs, family offices, and domestic and global institutional investors. Ashish Mehrotra, Managing Director and CEO of Northern Arc Capital, said the first close reflects continued investor interest in private credit as a strategic allocation.
According to the company, Northern Arc has launched 15 funds since its inception in 2014, seven of which have fully matured with a weighted average XIRR above 14.5%, without extensions or principal loss to investors. It has cumulatively distributed over Rs. 10,000 crore of principal and coupon. Across the past decade, the platform has deployed over Rs. 16,500 crore across 15 AIFs and two PMS offerings and serves more than 1,500 investors.
In its Q2FY27 results, Northern Arc Capital reported consolidated PAT of Rs. 129 crore, up 41% YoY, and NII of Rs. 425 crore, up 32% YoY. Lending AUM rose 34% YoY to Rs. 19,003 crore, with direct lending AUM up 64% to Rs. 12,502 crore, now 66% of the portfolio. Credit costs improved by 11 bps YoY to 2.66%. All figures are stated as of September 30, 2026, per the release.
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