Aditya Birla Sun Life AMC plans AIF expansion with private credit schemes

Aditya Birla Sun Life Asset Management Company (ABSL AMC) plans an expansion in its alternatives business with three new fund launches in the private credit space.

With rising interest from ultra high net worth individuals (UHNIs) and Indian family offices from Tier-2 cities, the AMC has pegged the opportunity in the performance credit market in India at $100 billion. The AMC expects the private credit segment to grow to $3.5 trillion by 2028 in India.

The private credit funds cater to unlisted companies for their capital needs, such as acquisition financing, capital expansion, and other financing avenues parallel to the banking and non-banking financial company (NBFC) segment.

ABSL AMC has targeted Rs 2,500 crore ($298 million) for its performing credit fund, ABSL Structured Opportunities Fund Series 2, for which the first close may be done by early next year. It is aiming to raise $300 million through its India Yield Advantage Fund, which will be offered through its entities based in Singapore to raise money from offshore investors.

“Private credit has picked up in India. It was at around $2.4 billion in 2018, while the same in the first half of FY25 stands at around $6 billion. In fact, private credit has given better returns than bonds and corporate papers. We are targeting 15-16 per cent in our fund,” said A Balasubramanian, MD and CEO, ABSL AMC.

The official added that the total assets under management for the alternatives segment under ABSL AMC stood at around $2.5 billion.