Indian private credit funds rush to fill gap left by banks
private credit business, filling a void left by banks and non-bank lenders and mirroring a pick-up in activity across Asia. Private credit funds typically invest in debt or hybrid securities of unrated and lower-rated companies.Kotak Alternate Assets Managers (KAAM), Edelweiss Alternatives Asset Advisors, InCred Alternative Investments and Vivriti Asset Management are all looking to increase the size of such funds or raise new funds, officials at these firms said.
«The wholesale lending space has been vacated by banks and mutual funds are wary of the space, while insurance companies blow hot, blow cold,» said Lakshmi Iyer, head of investments at KAAM, which closed an 8 billion rupees ($96.7 million) private credit fund. «This a space where alternate asset managers like us are finding opportunity.»Edelweiss Alternatives has invested 359 billion rupees in private credit and is looking to launch its next real estate credit fund.
Vivriti Asset aims to add 15 billion rupees to the roughly 35 billion rupees it already manages in private credit, managing director Vineet Sukumar said.INCREASING DEMAND Such deals totalled $5.3 billion in 2022, according to EY. Most recently, Rattan India Power and a Shapoorji Pallonji group entity Goswami Infratech raised money from such funds.
«While our earlier focus was on providing capital at a holding company level, we are now also witnessing an increasing trend of operating companies approaching alternative lenders like us for growth capital,» said Amit Agarwal, head of special situation investing at Edelweiss Alternatives. While there is a lot of interest in this space, deals have been difficult to close as pricing doesn't adequately reflect the risk, said a credit market participant who
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