Mumbai-based ASK Private Wealth, the wealth advisory and family office arm of ASK Group, has floated its maiden private credit fund, joining many other asset managers who are tapping into the growing asset class.
The wealth advisory firm aims to raise about Rs 1,000 crore ($122 million) via the alternative investment fund (AIF). The fund will be operating in the performing credit segment and will avoid distressed assets, real estate, utilities, state-owned companies and venture funding situations, it said in a statement.
The wealth manager has appointed Shantanu Sahai as senior managing partner to lead the fund. Sahai was previously managing director and head of debt at Nomura.
ASK joins Kotak Mahindra, JM Financial, Piramal Group, Centrum Group, asset managers like 360 One, Vivriti, InCred, Xander Group-backed Sanctum Wealth and private equity firm PAG-backed Nuvama in floating a private credit fund. JM Financial, for instance, hit the first close of its maiden performing credit fund, JM Credit Opportunities Fund–1, after securing commitments of over Rs 600 crore ($73.2 million).
Private credit funds provide capital which is more flexible relative to bank loans, according to a recent analysis by VCCircle. Funding from banks and NBFCs is mostly available to those with a credit rating of AAA or at least AA due to regulatory restrictions, while private credit funds provide debt irrespective of the rating as long as they are convinced about the borrower’s business model and profitability.
ASK said the new fund will largely be sector-agnostic but it will seek opportunities in sectors that are seeing private equity activity. These include healthcare, consumer, financial services, IT and ITES, manufacturing, specialty chemicals, and renewable energy, among others.
The close-ended fund will have a tenure of five years from the first close. It will invest across both operating companies and holding companies, ASK said.
“The rise of private credit is fuelled by domestic M&A consolidation and the impaired primary equity markets, creating a demand-supply gap,” said Rajesh Saluja, CEO and MD at ASK Private Wealth.
Saluja said incremental demand for such credit solutions is an estimated Rs 30,000 crore annually. That's where the new credit fund comes in, he said.
He attributed the rising popularity of private credit to the fact that India is in the initial phase of a new credit cycle, fuelled by private sector investment. Robust economic activity across all major sectors, strong economic growth, government infrastructure spending and policy support, and India’s growing status as a major manufacturing hub are some other factors that have driven the demand for private credit.
Limited partners for the fund may include high-net-worth individuals (UHNIs, HNIs), government institutions, corporate houses, public sector undertakings, private banks, insurance companies, global development financial institutions, multilateral organizations, and foreign investors, among others.
