JM Financial Group has marked the first close of its maiden performing credit Fund – JM Credit Opportunities Fund – 1 raising over ₹600 crore (around $73 million). The fund is managed by JM Financial AMC as Investment Manager.
Mumbai-based JM Financial Group will invest debt capital in local companies via a new fund, adding another asset class to its portfolio that already includes private equity, distressed assets, non-banking finance and mutual funds.
JM Credit Opportunities Fund – 1 targets a final close around June 2024 with a target deployment of Rs 1,500 crore inclusive of co-investments with JM Group, the company said in a statement.
The credit fund will be managed by Pranob Gupta as the Managing Director & CIO.
“As per current discussions, JM Credit Fund and JM Group along with associated co-investments has obtained Rs 600 crore of commitments which will be invested over the current quarter,” Gupta said.
The Mumbai-based firm is looking at deal sizes ranging from ₹200- 500 crore and above where JM Credit Opportunities Fund – 1’s cheque sizes will range from ₹50-100 crore.
Launched in March this year, the category II AIF registered with SEBI is a sector-agnostic private credit fund that aims to capture opportunities from the dislocations in credit markets caused by regulatory differences between banks and NBFCs, for both promoters and operating companies, it further said.
While being sector-agnostic, the fund says it will look at opportunities across consumer, healthcare, manufacturing, conglomerates, B2B and services, renewables ESG oriented companies and sectors.
“This fundraise marks the first milestone of our Credit Fund business. It underscores the commitment of the franchise to the credit business, which is currently active through the NBFCs (non-banking financial companies), ARC (asset reconstruction company) and distressed fund formats,” said Anuj Kapoor, Managing Director & CEO, Private Wealth and Alternatives Asset Management, JM Financial.
He added, “The fund also underlines the strong appetite of HNIs and family offices for this asset class. Over time, we plan to launch adjacent strategies in line with the firm and team’s expertise, and evolving market opportunities.”
The fund, which obtained SEBI approval in January, targets gross returns in the mid to high teens through a mix of secured lending, with potential upside participation in equity performance of underlying companies.
Private Credit is a key asset class and with this flagship credit fund of JM Financial Group, we plan to offer investors a carefully curated portfolio of deals with strong focus on disclosure and governance, Gupta added.
While many credit funds are coming up to lend to startups as venture capital funding dries up, several others are eyeing the performing credit segment to support mid-sector companies with strong fundamentals which are currently untapped by the banks and non-banking financial companies (NBFCs).
Global buyout funds such as Apollo Global, Blackstone, KKR, PAG and Bain Capital already have private credit funds. In India, a number of large financial services groups manage private credit funds. These include Piramal Group, Edelweiss and Kotak Group. Several others have also entered the segment. These include Vivriti Asset Management, Arka Investment Advisory, Ask Group, Sundaram Alternates, Modulus Alternatives (formerly Centrum Alternatives) and others.
In the private equity space, JM Financial Group is in process of raising its third fund targeting a corpus of ₹1,500 crore (around $200 million).
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Updated: 04 Jul 2023, 07:07 PM IST