RV Capital gets Rs 500 crore, to focus on 'dislocations'
RV Capital Management has raised its maiden private credit fund in India of ₹500 crore and is looking to raise up to an additional ₹300 crore. The fund targeting a return of 14% to 16%.
The fund is following a unique strategy where 20% of the corpus will be invested in secondary bonds of good corporates going through a difficult patch due to macro changes.
Shyamal Karmakar, chief investment officer at RV Capital India, said that the fund will capitalise on market dislocations, which are caused due to macroeconomic factors affecting bond prices or opportunities arising from sellers exiting positions.
The fund has invested in two companies — one is a holding company structure, which is backed by very strong collateral and the second is a solar energy company where the investors are big marquee names, Karmakar said.
The fund's strategy gives flexibility in targeting investments at different points in time.
For instance, the overseas fund had invested in dollar AT1 bonds of HDFC Bank after the price crash following the Credit Suisse incident. The fund is looking to invest in bonds in the A to A+ rating range.
With a typical exit period ranging from three to five years, the fund's investment is expected to see pre-payments as these are borrowed at high rates.
