Centrum Alternatives, an asset manager headquartered in Mumbai, is looking to launch its second private credit fund at a time when volatility in the equity markets, coupled with a high-interest rate environment, is making it difficult for companies in India to raise capital.
“We got the registration [from SEBI] in March and are looking forward to the launch in May,” Rakshat Kapoor, CIO & fund manager – private credit fund at Centrum Alternatives, told DealStreetAsia in an interview.
The firm, which is being rebranded as Modulus Alternatives under the larger Centrum Group, is eyeing a corpus of Rs 1,250 crore (about $152 million) along with co-investments of a similar size.
The fund, titled the India Credit Opportunities Fund, will follow the strategy to focus on performing credit and “and track mid-teens pre-tax investor returns”, said Kapoor, adding that the reason for the rebranding exercise is “because we raise and manage third-party capital”.
It plans to focus on sectors such as healthcare and pharmaceuticals, speciality chemicals, branded consumer, and logistics and warehousing.
Centrum’s fundraising development was first reported by VC Circle.
Its first fund — Centrum Credit Opportunities Fund — established in 2018 has deployed close to Rs 1,740 crore across 15 investments in the ratio of 1:1 in terms of capital raised and co-investments with limited partners (LPs).
“Our Fund I is fully deployed. If we can redeem anything, maybe we can do one more investment,” said Kapoor. “We have kept a higher target [corpus] for Fund II, considering that we have done well in our previous fund,” he added.
The Centrum Credit Opportunities Fund has already clocked as many as seven exits and claims to have returned about Rs 700 crore to its LPs.
Centrum Alternatives primarily counts high net worth individuals (HNIs) and ultra-high net worth individuals (UHNIs), besides family offices, among its LPs.
“For Fund II, we are targeting to have some institutions too. Having said that, since the number of family offices is growing in India, the capital contributed by them will continue to be bigger in the LP space,” said Kapoor.
According to a report by 256 Network and Praxis Global Alliance India, investments from family offices in India are expected to make up 30% of the total $100 billion of startup funding by 2025.
Among others who are raising credit funds, InCred Asset Management is targeting a Rs 500-crore ($61.2 million) corpus with a greenshoe option of another Rs 500 crore. More recently, Stride Ventures announced the first close of its third venture debt fund at $100 million.