Introduction to Avendus’ Structured Credit Fund III
Avendus has successfully completed the first close of its Structured Credit Fund III (ASCF III), securing over Rs 1,000 crore in investor commitments since its launch in January 2025. This achievement is a testament to the trust that investors have placed in the strategy, team, and strength of the Avendus ecosystem. The fund has drawn participation from both existing and new investors, including domestic high-net-worth individuals and family offices.
Achieving Milestones
According to Anshul Jain, executive director of Avendus Structured Credit Fund, achieving commitments of over Rs 1,000 crore within a short period is a significant milestone. The fund has already drawn 15% of the capital and completed its first investment, demonstrating its strong potential for growth.
Targeting Growth-Stage Companies
ASCF III is registered as a Category-II Alternative Investment Fund with SEBI and targets mature and growth-stage companies with strong, differentiated business models. The fund provides customized private credit solutions, primarily through secured debt investments in both operating and holding companies, with selective exposure to hybrid instruments. It is sector-agnostic, but 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
Nilesh Dhedhi, managing director of Avendus Finance, notes that the demand for flexible capital is growing as traditional lending remains rigid. With traditional lenders constrained by a standardized lending approach coupled with volatility in other capital market sources, there is a rising preference for flexible capital that can help scale the ambitions of Indian companies and entrepreneurs. Avendus has executed transactions worth over Rs 10,000 crore over the past eight years and has experience across more than 100 deals.
Fund Details
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 that the firm’s early presence in the private credit market has made it a leader in high-yield performing credit.
Performance of Earlier Funds
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%. This demonstrates the potential for ASCF III to deliver similar returns and provide attractive outcomes for investors.
About Avendus
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.
Conclusion
In conclusion, Avendus’ Structured Credit Fund III has made a strong start, securing over Rs 1,000 crore in investor commitments and completing its first investment. With its focus on growth-stage companies and customized private credit solutions, the fund has the potential to deliver strong returns and provide attractive outcomes for investors. As the demand for flexible capital continues to grow, Avendus is well-positioned to capitalize on this trend and establish itself as a leader in the private credit market.
