MO Alternates launches its maiden private credit fund

The %3,000 crore fund has drawn capital from family offices, ultra-HNIs and institutions

- [e-mail]

The fund seeks to address the needs of mid- to large-size corporates across sectors such as manufacturing, engineering and healthcare.

(ISTOCKPHOTO)

Motilal Oswal Alternates has ventured into private credit through a ₹3,000 crore fund, marking the group’s entry into the fast-growing asset class to back high-growth, profitable firms, a top executive at the company said on Thursday.

“There is a fundamental need for credit as India continues to grow at between 6% and 7% or more,” Rakshat Kapoor who heads Private Credit at MO Alternates, said in an interview. “Over the next few years, with ongoing capex cycle, the high requirement for capital that may not entirely come from traditional sources such as banks or public/ private equity, a significant chunk will come from the credit funds.”

The proposed fund, which includes a green shoe option of ₹1,500 crore, will blend secured lending with equity-style diligence and aims to generate risk-adjusted returns from straight debt yields as well as potential equity-linked gains.

“We expect to generate returns through a combination of regular fixed contracted yields and or returns linked to equity performance. This is proposed to be combination of regular private and hybrid credit fund and will have differentation in the existing credit funds landscape,” Kapoor said.