Private credit firm Neo Asset seeks to raise $700 million for second fund

By Saikat Das and Preeti Singh 

Indian money manager Neo Asset Management aims to raise as much as Rs 6,000 crore ($699 million) for its second private credit fund, according to people familiar with the matter, the latest sign of a fast-expanding market increasingly dominated by local firms.

 

Mumbai-based Neo began pitching the latest fund to investors a few weeks ago, targeting wealthy individuals, family offices and institutions, said the people who declined to be identified discussing confidential information. If completed, the new fund will be more than double its predecessor that closed with Rs 2,575 crore in June. 

 

 

The money manager plans to deploy the capital to support mid-sized companies in so-called special situations that include acquisition financing, one-time settlements for debt resolution, and extending the maturity or refinancing of existing borrowings, the people said. Neo hopes to wrap up fundraising in the next 18 months and will remain open to opportunities in a wide range of industries, they added.

 

A media relations representative at Neo declined to comment when reached by Bloomberg News.

 

Private credit is growing rapidly in the world’s most populous nation, thanks to a healthy economy that has elicited an unprecedented flurry of lending from local firms. Prime Minister Narendra Modi’s plans for large infrastructure projects also have created a need for middle-market funding and bespoke financing solutions.

 

The ambitious infrastructure spending, which S&P Global Ratings’ Indian unit CRISIL expects to balloon to Rs 143 trillion by 2030, has helped domestic firms gain market share given their local expertise and cheaper costs of capital.

 

Private credit deals in India in the first half of 2024 soared to an all-time high for any six-month period, with $6 billion deployed across 96 deals, according to a report from Ernst & Young.