India: BPEA Credit closes Fund III with capital commitments worth $475m

India: BPEA Credit closes Fund III with capital commitments worth $475m

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Baring Private Equity Asia’s credit unit, BPEA Credit, on Monday announced that it has closed its third private credit fund, BPEA Credit – India Fund III, with capital commitments worth $475 million.

Fund III, which is incorporated in the state of Mauritius, has secured commitments from several North American pension fund managers such as the Canada Pension Plan Investment Board; global development institution IFC; and other prominent financial institutions in Asia and the Middle East, the firm said in a statement.

The third fund, which is more than three times larger than its predecessor fund, will continue BPEA Credit’s strategy of focusing on secured lending to fast-growing Indian mid-market companies, the statement added. It seeks to invest about $20 million to 40 million dollars across approximately 20 companies to build a balanced and well-diversified portfolio across a range of sectors within the Indian market.

The previous fund raised $135 million in the final close in 2019.

“We have raised our largest fund to date by some margin, with support from major international institutions in Asia and North America. We see India as one of the primary markets for private credit in Asia in the coming years, driven by strong demographics, macro fundamentals, and a large amount of attractive growth opportunities in several sectors,” said Kanchan Jain, Head of BPEA Credit.

BPEA Credit claims to have established itself as one of the largest private credit platforms in India. Working alongside domestic banks and other lenders, BPEA Credit seeks to support profitable fast-growing mid-market businesses with customised non-dilutive growth capital solutions.

Since its inception in 2011, the BPEA Credit team has deployed close to $800 million across 50+ deals.

“Our strategy involves not just identifying promising companies in high-growth segments but also businesses with strong ESG credentials. The private credit sector continues to be underpenetrated across Asia, and we see the opportunity as highly scalable. India Fund III will allow our investors to participate in that growth across a well-diversified portfolio while supporting exciting companies that make up the engine room of the Indian economy,” Jain said.

The private credit market in India is showing a healthy growth trajectory, bolstered by the growth of new players, regulatory measures by RBI and SEBI, and the setting up of the GIFT city initiative aimed to develop a framework comparable with international standards, according to global consulting firm EY.

Last month, Neo Asset Management marked the first close of its Special Credit Opportunities Fund at $78 million. In May, Kotak Alternate Assets, managed by Kotak Investment Advisors, said it will launch a Rs 1,000-crore private credit fund, a category II alternative investment fund (AIF). The fund will have a green-shoe option for raising another Rs 1,000 crore.

 

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