Mumbai, Jan 19 (PTI) Avendus PE Investment Advisors, the asset management arm of the Avendus Group, has raised over Rs 500 crore in the first close of its structured credit fund II which has a target of garnering Rs 1,000 crore in corpus on completion.

For the Sebi-registered category II alternative investment fund, this is the second fund with the first one having invested Rs 1,000 crore in nine companies since its launch in October 2017 and has exited eight of them giving 115 per cent of capital cash and an average internal rate of return of 18 per cent, Nilesh Dhedhi, the fund manager at Avendus Structured Credit Fund, told PTI on Wednesday.

He said like the first fund, the second will also be sector agnostic, this time around there will be an increase in the quantum of investment by 50 per cent on average from Rs 100 crore in the first fund.

The structured credit fund is part of the Avendus Groups credit vertical which is also into debt syndication, and NBFC arm Avendus Finance.

Dhedhi said the second fund was launched three months ago and has a green shoe option of Rs 500 crore to take the overall corpus to Rs 1,000 crore and will offer 16-18 per cent return to investors.

He said the remaining one investment from the first fund will be exited over the next couple of months. He said of those nine firms, which are mid-sized ones, only one was a listed entity but during the course of their investment four of them went public.

“Our focus has been and will remain on the unlisted companies in the non-realty and infra space. Our first fund was mostly invested in pharma and chemical space and we will continue to focus on those spaces with an addition of services for the new fund,” Dhedhi said.

On the market size of the AIF-led structured credit space, he said this is small with around USD2 billion in AUM between seven-eight players. But this has been growing after the IL&FS bankruptcy which forced many companies to turn to players like them.   On the quality of the invested assets, he said most funding is given to promoters and most of them have been pre-paying the loan, indicating there is no question default at all. “Moreover, the entire book is fully secured.”   He said the capital commitment primarily has come from over 100 family offices, high net worth individuals and four financial institutions. The fund will deploy the money in a differentiated credit strategy focused on providing structured credit solutions to high quality, growth-oriented companies with differentiated business models, backed by marquee sponsors and the fund is evaluating deals in IT services, B2B services, specialized manufacturing, healthcare etc.

The Avendus Group, established in 1999 in Mumbai and is present in 10 cities including in New York, London and Singapore, is into investment banking, wealth management, credit solutions and asset management. PTI BEN MKJ

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