PE firm True North forays into private credit; raises Rs 1,000 crore fund

Private equity firm True North has announced its entry into private credit and has already raised over Rs 1,000 crore for its fund, which it established in 2022 and plans to close by the end of December this year. The development is part of its goal to diversify its investment strategies and scale its operations.

Aiming for middle-market dominance

The firm's private credit strategy is centred on becoming the go-to provider for middle-market companies in India. True North aims to offer risk-adjusted returns to investors while adding value to partner companies.

Investment approach

True North's private credit segment is focused on collaborating with middle-market companies needing tailored financing solutions. The firm upholds a philosophy of respect for all stakeholders, including investee companies, investors, and regulators.

Notably, the PE firm establishes strong, long-term relationships and conducts thorough research to provide agile and bespoke financing options.

Fund dynamics

True North said it has already engaged in eight investments through this fund, achieving one full exit and one partial exit. 

It has significantly raised domestic capital for the first time from over 400 distinct investors, including domestic financial institutions, family offices, and high-net-worth individuals (HNIs). The firm is dedicated to maintaining transparency and fairness with its Limited Partners.

With a focus on profitable, cash-flow-generating businesses, True North aims to bridge the supply-demand gap in the mid-market segment, offering capital solutions for shorter tenures. The firm targets an internal rate of return (IRR) of 15-18%, focusing on delivering a 13%-14% net return.

The fund, named ‘Performing Credit Regular Income Fund’, is expected to close with around Rs 1,300-1,400 crore of capital by December.

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