Neo Asset Management has successfully raised INR 2,575 crore ($308 million) through its inaugural special credit opportunities fund aimed at providing flexible financing solutions to profitable businesses. The fund, focusing on secured investments with collateral, has already made 12 investments and achieved exits from 2 within 15 months. Targeting a strong gross internal rate of return (IRR) of 22-24%, Neo's fund taps into the expanding private credit market in India, reflecting strong investor demand for income-generating alternatives amidst current market dynamics.
Neo Asset Management, a wealth management firm, has raised a significant INR 2,575 crore ($308 million) through its first ever special credit opportunities fund. This fund aims to bridge the gap for profitable businesses that face difficulty securing loans through traditional channels like banks.
The Neo Special Credit Opportunities Fund focuses on providing customized credit solutions to these companies. Unlike traditional bank loans, these solutions are designed to be more flexible and cater to the specific needs of each business. The fund has already made 12 investments and successfully exited from 2 in just 15 months, demonstrating its active approach.
All the investments made by the fund are secured by collateral, providing an extra layer of protection for investors. In addition to the company's cash flow, this collateral helps to minimize risk. The fund is targeting a gross internal rate of return (IRR) of 22-24% for its investors, aiming to deliver strong returns.
Private credit, which refers to loans provided by non-bank institutions, is a growing asset class globally, with an annual growth rate of 15-18%. In India, the private credit market is also expanding rapidly. This asset class offers investors the benefit of regular income with potentially lower risk compared to other investment options.
The strong response to Neo's fund reflects the growing demand for yield and regular income among investors. Hemant Daga, CEO of Neo Asset Management, said, "We are overwhelmed by the positive response... This reflects a massive demand for yield and regular income from clients," highlighting the unmet needs in the market.
The successful launch of this fund, raising the highest amount for a maiden credit fund-raise in the country according to Neo, establishes Neo Asset Management as a key player in offering alternative investment solutions in India. The company believes this is just the beginning and expects continued growth in the dynamic Indian alternative market landscape.
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