Institutional investors step up bets on private credit as insurers, pension funds and DFIs back new funds
Mumbai: Institutional investors are increasing allocations to private credit funds, with insurance companies, pension funds and development finance institutions emerging as key contributors to new fundraising.
Institutional investors accounted for 22-25% of the ₹6,200 crore corpus of Neo Alternative Asset Managers' second special credit opportunities fund, compared with 1-2% in its first fund, the firm said. Ascertis Credit's fourth fund, which crossed $700 million in commitments in October, attracted both existing and new institutional investors At Neo, domestic insurance companies form a large part of the institutional pool, said chief executive Hemant Daga. It also received commitments from overseas pension funds.
Ascertis Credit, whose fourth fund crossed $700 million (around ₹6,500 crore) in commitments in October, saw investments from existing and new institutional investors, including insurance companies and development finance institutions.
"The strong reception comes amid increasing institutional interest in performing private credit strategies as investors seek resilient income-generating investments away from market volatility with attractive risk-adjusted returns," Ascertis said in a statement.
Institutional investors are increasingly evaluating private credit separately from private equity and venture capital, with greater focus on the risk, returns and track record of individual credit funds.
Neo is targeting 35-40 investments, with an average size of ₹250-300 crore, and expects gross returns of 21-23%. It will focus on collateral-backed lending to businesses with established operating cash flows, with about 95% of transactions involving operating firms. Annual investment opportunities are estimated to be nearly ₹1 lakh crore, double the level of around ₹50,000 crore three years ago. Reported transactions were nearly $7 billion in the first nine months of the year, said Daga.
Institutional investors accounted for 22-25% of the ₹6,200 crore corpus of Neo Alternative Asset Managers' second special credit opportunities fund, compared with 1-2% in its first fund, the firm said. Ascertis Credit's fourth fund, which crossed $700 million in commitments in October, attracted both existing and new institutional investors At Neo, domestic insurance companies form a large part of the institutional pool, said chief executive Hemant Daga. It also received commitments from overseas pension funds.
Ascertis Credit, whose fourth fund crossed $700 million (around ₹6,500 crore) in commitments in October, saw investments from existing and new institutional investors, including insurance companies and development finance institutions.
"The strong reception comes amid increasing institutional interest in performing private credit strategies as investors seek resilient income-generating investments away from market volatility with attractive risk-adjusted returns," Ascertis said in a statement.
Institutional investors are increasingly evaluating private credit separately from private equity and venture capital, with greater focus on the risk, returns and track record of individual credit funds.
Neo is targeting 35-40 investments, with an average size of ₹250-300 crore, and expects gross returns of 21-23%. It will focus on collateral-backed lending to businesses with established operating cash flows, with about 95% of transactions involving operating firms. Annual investment opportunities are estimated to be nearly ₹1 lakh crore, double the level of around ₹50,000 crore three years ago. Reported transactions were nearly $7 billion in the first nine months of the year, said Daga.
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