Aditya Birla Sun Life AMC Raises USD 300 Million Private Credit Fund

Mumbai, Oct 15 (PTI) Aditya Birla Sun Life (ABSL) Asset Management Company aims to raise USD 300 million private credit fund from overseas investors keen to benefit out of the return possibilities that India offers, a senior official said on Tuesday.

As part of its efforts to expand in the alternatives space, ABSL AMC has also launched a private credit fund under which it aims to raise Rs 2,500 crore from domestic investors and deliver over 15 per cent returns, chief executive and managing director A Balasubramanian told reporters here.

The overseas fund offering, christened 'India Yield Advantage Fund', will be launched after Diwali by one of ABSL-linked entities registered in Singapore and raise money from overseas institutional investors for lending to Indian companies, as per a senior official.

It will take up both performing credit and special situation opportunities which are showing early signs of stress, the official said, adding that it will be looking at giving returns of around 20 per cent per annum to the investors.

The company's MD and CEO explained that the private credit is an over USD 100-billion opportunity in India because of the flexibility it offers for helping companies and promoters in specific situations where the banks may not be able to fund a loan requirement, like for holding onto higher stake in a company, pre-IPO placement etc.

Therefore, it delivers higher than fixed income investment returns comparable to equity investments, he said, adding that the Rs 2,500 crore domestic offering, christened ABSL Structured Opportunities Fund Series 2, will deliver over 15-16 per cent returns.

The company has invested 10 per cent or Rs 250 crore into the fund as the sponsor, and is targeting to announce the first close by early 2025, an official said, without disclosing the quantum of the commitments.

The company has already made its first investment of Rs 100 crore in a financial services-focused firm's holding company as part of a wider fundraise from a clutch of lenders, the official said.

ABSL Structured Opportunities Fund Series 2 will focus on performing credit, and avoid stressed situations, and borrowers in asset-light sectors such as trading, services and gems and jewellery.

Balasubramanian said the overall assets under management for the company under its alternate investment business is over USD 2 billion, including USD 1.2 billion in offshore, Rs 4,500 crore in equities AIF and realty business at Rs 750 crore.

Declining to give any targets for how he sees the AUM growth in medium term, he said this is a very promising business and the company will focus on it.