Axis AMC launches private credit fund; eyes Rs 1,250 cr corpus

economictimes.indiatimes.com:

Axis Asset Management, the mutual fund arm of private sector lender Axis Bank Ltd, has launched a private credit alternative investment fund (AIF) and is aiming to raise as much as Rs 1,250 crore from investors, said people aware of the development. The private credit fund is part of Axis Mutual Fund’s alternative assets business, which comprises late-stage private equity and real estate AIFs on the private markets side, and portfolio management services and long-only equity AIFs on the public markets side.

Axis manages assets worth about Rs 5,000 crore under these asset classes. Private credit funds lend to profitable, cash flow-generating businesses which are looking to raise debt capital for needs that banks are restricted from financing, such as merger and acquisition finance or promoters looking to buy out shareholders in the company, etc.

“Axis is in talks with several institutional investors such as banks, insurance companies and corporate treasuries for the first close of the fund,” one of the persons cited earlier said, requesting not to be named. “It expects to achieve the first close in the next four to six weeks.

Some family offices may also come on board for the first close.” The platform is targeting a base size of Rs 1,000 crore for the fund and a green shoe of Rs 250 crore, the person said, adding that Axis is targeting a first close of about Rs 500 crore for the fund. “Axis had raised a much smaller private credit fund two years ago with a corpus of Rs 200 crore, but that was more as a proof of concept.

They are raising a much bigger fund now and targeting institutional investors also,” the source said. The fund will be sector agnostic and will seek to generate gross yields in the 13-14% range, the