**Title:** Neo Asset Management Targets ₹5,000 Crore for New Credit Fund
**Meta Description:** Neo Asset Management aims to raise ₹5,000 crore for a private credit fund as equity markets slow, having already secured ₹2,000 crore in three months.
**URL Slug:** neo-asset-management-private-credit-fund
**Headline:** Neo Asset Management Seeks ₹5,000 Crore for New Private Credit Fund Amid Market Slowdown
Neo Asset Management is strategically positioning itself to raise ₹5,000 crore for a new private credit fund, capitalizing on the current slowdown in public listings and the stock market. The Neo Special Credit Opportunities Fund-II, which launched just three months ago, has already attracted ₹2,000 crore from family offices, ultra-high-net-worth individuals, and institutional investors, including insurance companies.
Hemant Daga, co-founder and CEO of Neo Asset Management, highlighted that the opportunity for private credit is expanding as equity markets face a downturn. He noted that the competition from equity as a funding source is expected to diminish over the next six to nine months due to ongoing market corrections. “The demand for capital in special situations, such as bridge financing, has remained steady over the past two years, making it an evergreen opportunity,” Daga stated. He emphasized that with equity capital becoming less accessible, the scope for private credit has broadened.
In 2024, India recorded private credit transactions worth $9.2 billion across 163 deals, reflecting a 7% increase in value, according to an EY report. This growth comes amid rising competition from large fundraises and the emergence of new alternative investment funds.
Neo Asset Management focuses on capital and machinery-intensive sectors, including pharmaceuticals, hospitality, paper, and steel. The firm employs a rigorous three-point evaluation process when assessing potential investments: cash flows, collateral, and counterparty risk. Daga explained, “We only consider companies that are EBITDA-positive. If a business is not profitable, it raises concerns about its ability to repay loans. Our goal is to select borrowers who can start servicing interest and principal repayments immediately.”
The fund aims to build a diversified portfolio with 25 to 30 investments, each ranging from ₹150 to ₹300 crore. Daga also stressed the importance of assessing the counterparty’s history, including their past borrowing behavior and any instances of default. The firm typically avoids lending to technology companies due to their lack of tangible assets.
In conclusion, as the market landscape shifts, Neo Asset Management is poised to leverage the growing demand for private credit, offering a promising avenue for investors seeking stable returns in uncertain times.
**FAQ:**
**What is the focus of Neo Asset Management’s new private credit fund?**
Neo Asset Management’s new private credit fund focuses on capital-intensive industries and aims to provide financing solutions in a market where equity capital is becoming less accessible.
