Avendus raises over Rs 1,000 crore in first close of Structured Credit Fund III, targets Rs 2,000 crore total

Avendus has announced the first close of its Structured Credit Fund III (ASCF III), raising more than Rs 1,000 crore in investor commitments since its launch in January 2025. The fund has drawn participation from both existing backers and new investors, including domestic high-net-worth individuals and family offices. 

"Achieving commitments of over Rs 1,000 crore, equivalent to our previous fund size, within a short period of time is clear testimony to the continuing trust investors have placed in the strategy, team and strength of the Avendus ecosystem," said Anshul Jain, executive director of Avendus Structured Credit Fund.

"The fund has already drawn 15% of the capital and completed its first investment," Jain added.

Targeting growth-stage companies

ASCF III, registered as a Category-II Alternative Investment Fund with SEBI, targets mature and growth-stage companies with strong, differentiated business models and capital solutions, which can significantly enhance the value for these businesses.

It is the third fund in the high-yield private credit fund series, aimed at significantly scaling a validated strategy refined over a period of seven years and two previous fund cycles (ASCF I and ASCF II). The fund focuses on customised private credit solutions, primarily through secured debt investments in both operating and holding companies, with selective exposure to hybrid instruments where appropriate.

It is sector-agnostic, though Avendus will leverage its deep corporate relationships and industry expertise in sectors such as pharmaceuticals, healthcare, manufacturing, chemicals, technology, consumer and B2B services.

Rising preference for flexible capital

Commenting on the broader market, Nilesh Dhedhi, managing director of Avendus Finance, noted that the demand for flexible capital is growing as traditional lending remains rigid.

"With traditional lenders constrained by a standardised lending approach coupled with volatility in other capital market sources, we see a rising preference for flexible capital that can help scale the ambitions of Indian companies and entrepreneurs," he said.

Dhedhi added that Avendus has executed transactions worth over Rs 10,000 crore over the past eight years and has experience across more than 100 deals.

Aiming to raise Rs 2,000 crore

The fund plans to raise a total of Rs 2,000 crore, with a green shoe option for another Rs 2,000 crore. ASCF III will aim to build a diversified portfolio of 12 to 18 investments, with ticket sizes ranging from Rs 200 crore to Rs 500 crore and targeted gross internal rates of return between 16 and 18%.

Kaushal Aggarwal, co-founder of Avendus, said the firm's early presence in the private credit market has made it a leader in high-yield performing credit. "Leveraging the group's deep-sector expertise and extensive corporate relationships, the platform has been consistently offering differentiated investment opportunities and attractive outcomes for investors," he said.

Avendus' earlier funds have delivered strong returns. ASCF I, launched in 2017, completed nine transactions and returned capital by mid-2022 with a gross IRR of 18%. ASCF II, launched in 2022, is fully deployed and is currently tracking an expected gross IRR of around 17%.

Founded in 1999, Avendus is a diversified financial services firm with operations in investment banking, wealth management, equities, credit solutions and asset management across 10 cities in India, the United States and Singapore.