Avendus raises Rs 1,000 cr in first close of third structured credit fund

Avendus Structured Credit Fund III secures Rs 1,000 crore in first close as investors seek tailored private debt with target IRRs of 16-18 per cent amid lending constraints

Avendus has raised more than Rs 1,000 crore in the first close of its third structured credit fund, as demand from high-net-worth individuals (HNIs) and family offices for customised private debt solutions grows in India’s evolving credit market.

 

The Mumbai-based financial services firm launched Avendus Structured Credit Fund III (ASCF III) earlier this year and has already drawn 15 per cent of the capital, said Anshul Jain, Executive Director, Avendus Structured Credit Fund. 

 

The fund aims to raise Rs 2,000 crore with a green shoe option for an additional Rs 2,000 crore, targeting gross portfolio internal rates of return (IRRs) between 16 per cent and 18 per cent, according to a company press statement.

 

“With traditional lenders constrained by a standardised lending approach, coupled with volatility in other capital market sources, we see a rising preference for flexible capital that can help scale the ambitions of Indian companies and entrepreneurs,” said Nilesh Dhedhi, Managing Director, Avendus Finance. 

 

The fund focuses on tailored private credit solutions, primarily through secured debt investments in both operating and holding companies, with selective exposure to hybrid instruments, the company said.

 

Over the past eight years, Avendus has executed more than Rs 10,000 crore in private credit deals and built a portfolio spanning over 100 transactions. Its platform focuses on companies in pharmaceuticals, manufacturing, healthcare, B2B services, consumer, and technology sectors. 

 

ASCF III follows the group’s earlier structured credit funds. The first fund, launched in 2017, was fully exited by mid-2022 with a gross portfolio IRR of 18 per cent. The second fund, fully deployed across 14 transactions, is tracking an expected gross IRR of around 17 per cent.

 

“Achieving commitments of over Rs 1,000 crore, equivalent to our previous fund size, within a short period is a clear testimony to the continuing trust investors have placed in the strategy, team, and strength of the Avendus ecosystem,” said Jain.

 

The third fund is expected to build a portfolio of 12 to 18 investments, with ticket sizes ranging from Rs 200 crore to Rs 500 crore, through a mix of secured loans and select hybrid instruments.