Avendus PE Investment Advisors has launched its third private credit fund, named the Avendus Structured Credit Fund III (ASCF-III), targeting a substantial raise of up to Rs 4,000 crore. This figure includes a green shoe option of Rs 2,000 crore. The fund adopts a sector-agnostic strategy, focusing on various industries, such as pharmaceuticals, healthcare, manufacturing, consumer goods, and technology.
Investment Strategy of ASCF-III
ASCF-III will emphasise the following areas:
- Secured credit transactions for both operating and holding companies.
- Selective hybrid structures.
The fund aims to develop a diversified portfolio consisting of 12 to 18 transactions, with an expected gross Internal Rate of Return (IRR) of 16% to 18%. Avendus PE Investment Advisors serves as the asset management arm of the Avendus Group.
Strategic Approach to Deal-Making
Anshul Jain, Executive Director of Avendus Structured Credit Funds, stated, “With ASCF-III, our focus will be on larger transactions, typically between INR 200 crore and 500 crore. We will leverage the unique corporate connections of Avendus Group for deal origination. By merging a specialised and diverse underwriting strategy with proactive risk management, we are positioned to deliver strong risk-adjusted returns for our investors through various market cycles.”
Track Record of Avendus
Avendus’ private credit platform is recognised as one of the most active in the country, having successfully executed deals exceeding Rs 12,000 crore over the last 12 years.
- ASCF–I, which was launched in October 2017, effectively completed its deployment across nine transactions and returned capital to investors by June 2022, achieving a gross portfolio IRR of 18%.
- ASCF–II, initiated in January 2022, has fully allocated funds across 14 deals and is expected to reach a gross portfolio IRR of approximately 17%.
Perspectives on the Private Credit Landscape
Nilesh Dhedhi, Managing Director of Avendus Finance, remarked, “India’s mid-market enterprises are increasingly turning to private credit as an essential financial solution, especially where capital flexibility is crucial. With private credit deals surpassing $20 billion in the past three years, this asset class effectively bridges the financing gap between traditional debt and equity, emerging as one of the fastest-growing asset categories.”
“As the private credit sector develops, it offers investors and businesses new opportunities for growth and strategic agility in an ever-evolving financial environment,” Dhedhi added.
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