Sundaram Alternates announced the first close of its corporate credit fund, Sundaram Emerging Corporate Credit Opportunities Fund Series I (ECCO I), at Rs 205 crores.
With a focus on small and mid-market borrowers who are struggling to access capital from regular institutional lenders, ECCO I will invest via high-yielding debentures and mezzanine securities in a portfolio of companies across micro, small and medium enterprises (MSMEs), small and medium-sized enterprises (SMEs), fintech, manufacturing, and services, said Sundaram Alternates.
This is a space that reportedly has an estimated $4-7 billion credit demand in India.
Launched in 2022, the ECCO I fund is a Securities and Exchange Board of India (SEBI) approved category II Alternative Investment Fund (AIF) and aims to raise Rs 500 crore with a green shoe option of Rs 500 crores.
The fund saw participation from marquee family offices, corporate treasuries as well as high-net-worth individuals (HNIs) and crossed approximately 40 per cent subscription in the first close within five months of the launch.
The fund is said to have a differentiated value proposition in the marketplace with a unique fund architecture, tight credit parameters to protect capital and risk-adjusted return structures for investors with the backing of Sundaram Finance Group.
The strong demand for this current income-oriented fund has been driven by a differentiated fund strategy as well as a growing appetite amongst investors for high-yield debt products as an effective diversification play with the backdrop of volatile equity markets, said the company.
“Private Credit in India is at an inflection point, and we see this asset class evolving significantly similar to global markets. We are well-positioned to capitalize on new opportunities created by the current economic environment. We are confident in our ability to continue driving compelling returns for our investors through the combination of our team’s deep market expertise and disciplined approach to investing,” said Vikaas M Sachdeva, managing director (MD) and Karthik Athreya, director and head of strategy - alternative credit of Sundaram Alternates.