Mumbai: Neo asset management is to raise the purpose 5,000 crores for a new private credit fund, feel a big opportunity as the public listing market slows down between the stock market recession.
NEO Special Credit Opportunity Fund-II, launched three months ago, has already secured An interview in an interview 2,000 crores from family offices, ultra-high-net-forth individuals and insurance firms such as insurance firms, hamented, co-founder and institutional investors such as Chief Executive Officers.
Private credit opportunity is getting better as the equity as a competitive pool would shrink for the next six to nine months, stated Daga, citing the ongoing improvement.
“In the last two years, the requirement of capital in special situations – such as bridge finance – has been continuously. This is an evergreen opportunity,” he said. “But with the equity capital being less accessible in the current market, our opportunity set has actually expanded.”
In 2024, India saw a private credit deals of $ 9.2 billion at a price of $ 9.2 billion during 163 transactions, according to an EY report. Competition is increasing between big funds and new alternative investment funds are getting registered.
Three-point filter
Mumbai-based alternative asset manager focuses on capital and machinery-intensive industries such as pharmaceuticals, hotels, paper and steel.
When evaluating companies, this fund follows a strict three-point filter: cash flow, collateral, and opposition, hemy fired, co-founder and Chief Executive Officer of Neo Asset Management, said in an interview.
“We consider only those companies that are Ebitda positive,” said Daga. “If there is a business loss, how will it repay the loan? The idea is to select the borrowers who can immediately start the service of interest and original payment.”
Fund aims to create a well diverse portfolio with 25-30 investments, each rangeing 150-300 crores. The NEO asset management has a total of five private credit funds.
Daga said it is important to assess the opposition. When lending to companies, NEO Asset closely examined the history of his previous behavior and borrowing, he said. These include checking whether the borrower is a willful defaulter in addition to other checks. It also avoids lending to technical companies due to lack of hard property.
Prior to the Neo Special Credit Opportunity Fund II, the Asset Management Company closed the NEO Special Credit Opportunity Fund-I in June 2024. 2,575 crores. The fund deployed 100% of its capital in 23 diverse investments and left seven of these investments.
The asset manager targets a return of about 23% per year from the new fund, mainly behind the coupon for credit to companies. NEO Special Credit Opportunity Fund-II planned to help companies in special conditions such as final-meal financing, one-time settlements, initial public offerings (IPOs), and bridge for others.
The Neo Group is supported by the parents of the Neo Asset Management, Peak XV Partners, MUFG Bank and Euclidian Capital. Prior to setting up an alternative asset management firm, Daga was the chief executive in Edelweiss Asset Management, where he participated with the Government of India to launch the country’s first Deb Exchange-Trade Fund.