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Sundaram Alternates, a wholly owned subsidiary of Sundaram Asset Management Company and Sundaram Finance, has launched its latest product, Performing Credit Opportunities Fund (PCOF) – Series I.
This closed-end Category II Alternative Investment Fund (AIF) seeks to generate attractive risk-adjusted returns by investing in high-yield corporate bonds and mezzanine securities. Investments are backed by strong business cash flows, hard assets, guarantees and equity collateral, ensuring robust risk management.
The fund will target mid-sized companies and will focus on sectors such as MSMEs, SMEs, fintech, manufacturing and services, especially those with revenue in the range of Rs 250 crore to Rs 500 billion.
PCOF Series I aims to deliver portfolio-level returns of 13-16% internal rate of return (IRR), with 12-13% net quarterly revenue distribution over a 4-4.5 year holding period. Provides investor returns.
The term of the fund is five years, with a two-year extension option. Its investment strategy focuses on cash flow-backed diversification and short- to medium-term duration, with a preference for senior secured credit. Sundaram Alternates said the fund will focus on “pure credit risk” while supporting mid-sized companies.
India’s alternative credit market is currently valued at approximately $80 billion, presenting significant growth opportunities. The private and non-bank credit sector contributes between USD 10 billion and USD 23 billion annually and is growing at a compound annual growth rate (CAGR) of 10-15%, further boosting the market potential, the company said in a statement. mentioned in.
Karthik Athreya, Head of Fund Strategy (Private Credit), Sundaram Alternates said, “We are excited to launch PCOF-I based on our strong track record in private credit investments. “We are at a critical point for private credit.” We believe that our disciplined investment approach and deep market expertise enable us to deliver attractive returns to our investors. ”
Mr. Athreya also highlighted the expected strong interest and development opportunities, noting that the strategy is well positioned in the current market environment.
