Neo Asset Management hits first close of second private credit fund at Rs 2,000 crore

Neo Asset Management, an established alternative asset management firm in India, announced the first close of its second flagship private credit fund, the Neo Special Credit Opportunities Fund-II (NSCOF-II), at Rs 2,000 crore.

Launched three months ago, the fund is registered under the Securities and Exchange Board of India (SEBI) as a Category II Alternative Investment Fund and is targeting a total corpus of Rs 5,000 crore.

Focus on mid-market companies  

NSCOF-II is designed to provide structured credit to mid-market, EBITDA-positive companies. Its strategy centers on extending credit backed by substantial hard asset collateral—at least two to three times the investment—and regular coupon payments.

Puneet Jain, co-founder and chief investment officer at Neo Asset Management, said the firm has a strong pipeline of investments in place and aims to build a well-diversified portfolio of 25 to 30 transactions, each ranging between Rs 150 crore and Rs 300 crore.

Building on past success  

The new fund follows Neo’s first private credit offering, the Neo Special Credit Opportunities Fund-I, which closed in June 2024 with a total raise of Rs 2,575 crore. NSCOF-I deployed 100% of its capital across 23 transactions, successfully exiting from seven of those deals over the past 18 months.

According to the firm, this track record underlines the firm’s disciplined investment approach and its ability to deliver risk-adjusted returns in the mid-market special situations space.

The first close of NSCOF-II attracted family offices, ultra-high net-worth individuals, and institutional investors, underscoring growing interest in private credit strategies.

Neo Asset Management currently oversees more than Rs 10,000 crore of assets under management, focusing on stable cash flows across various asset classes.  

Backed by global investors  

Neo Group, the broader parent entity, manages more than Rs 40,000 crore in assets under advisory. It counts Peak XV Partners, MUFG Bank, and Euclidean Capital among its backers and seeks to establish itself as one of India’s leading alternative asset management platforms.

Last year, Neo raised Rs 400 crore from MUFG Bank and Euclidean Capital, with continued participation from Peak XV, which had previously invested Rs 300 crore in October 2023.