Singapore’s RV Capital marks first close of India private credit fund

Singapore-based RV Capital Management’s India arm on Thursday announced the first close of its maiden performing private credit fund, having raised about a quarter of the target corpus. The alternative asset manager launched the India Credit “Plus” fund in June with a target corpus of ₹400 crore and a green-shoe option for a similar amount. “Performing credit” means lending to companies that are running their business on an ongoing basis, have a long track-record and are profitable at the Ebitda level.

For the first close milestone, the asset manager has raised about ₹100 crore in commitments from a mix of domestic and offshore investors including high- and ultra-high-net-worth individuals, and family offices. It aims to mark another fund close by next month, though it did not disclose the figure at which it will hit the milestone. It is aiming to raise about half of the target corpus by the end of the year, RV Capital said.

“As a global entity, we have observed a clear upward trend in the market's appetite for alternative financing options and an increasing number of private credit deals that are more attractively priced in terms of risk-adjusted returns,” said Shyamal Karmakar, India head and chief investment officer, RV Capital India. “The genesis of “Plus” in the Fund’s name is from the listed bonds which have the potential to generate similar returns as private credit and help to optimise risk-adjusted returns,” he added.

So far, it has made two investments from the fund. While it did not disclose the names of these companies, it said one was in a holding company of a large Indian conglomerate and the other in a solar energy platform, with marquee investors holding a majority stake.

Its investment ticket sizes range from ₹20-50 crore and could even be larger in case of co-investments or through offshore participation. Largely sector-agnostic, the fund focuses on private credit opportunities across the manufacturing, industrial, and services sectors, including holding companies and special purpose vehicles subject to robust, marketable collateral structure, strong visibility on exit, or backed by marquee promoter groups/investors.

It may also opportunistically invest a part of the fund in price-dislocated listed bonds and high-grade bonds. Currently, the fund is currently generating gross returns higher than its target of 14-16%.

Private credit is a rapidly growing asset class with a slew of asset managers in India and abroad offering products in this segment. In August, Mumbai-based ASK Private Wealth, the wealth advisory and family office arm of ASK Group, floated its first private credit fund with a target corpus of ₹1,000 crore to invest in the performing credit segment.

Other domestic asset managers that have ventured into this space include Kotak Mahindra, JM Financial, Piramal Group, Centrum Group, asset managers such as 360 One, Vivriti, InCred, Xander Group-backed Sanctum Wealth, and private equity firm PAG-backed Nuvama.

As for foreign investors, London-headquartered Apax raised about $750 million for the first generation of its dedicated credit funds as of late September. Its co-CEO said Apax sees private credit "as an important extra arrow in (its) quiver”.