Catalyst Management Advisers, an Indian private credit investment manager, plans to raise up to $250 million for its second mid-market performing credit fund, according to a source familiar with the matter.
The predecessor fund, SC India Credit Fund (Fund I), was launched in January 2018 and structured as a five-year closed-ended fund. Fund I is sized at up to $100 million, taking into account capital commitments and co-investments. It is understood that it has deployed as much as 70 percent of committed capital and is expected to be fully deployed by year-end.
Catalyst plans to launch the second fund with a broader investment scope. It will include lending to stressed and restructuring opportunities in selective sectors in pre-stages of Indian bankruptcy court processes, in addition to the growth lending the firm already does through Fund I.
Fund I mainly invests in secured growth lending opportunities in India. Its typical transaction sizes range from $5 million to $15 million. These loans are senior secured and have two- to three-year average maturities. It targets a gross internal rate of return of 12-14 percent in US dollar terms. The closed-ended fund has a five-year life with a two-year investment period.
Fund I is managed by SC Credit Trust, a joint venture between Mumbai-based Catalyst and Dubai-based Samena Capital. The trust is registered as a Category II Alternative Investment Fund with the Securities and Exchange Board of India.
The Indian fund’s investor roster includes Indian insurance companies, pension funds, family offices, as well as offshore investors from Japan, the Middle East and the Greater China region.
Samena Capital is an anchor investor in Fund I. Private Debt Investor’s request for comments to the Dubai-based firm was not returned.
PDI previously reported that Samena Capital planned to merge its Indian credit unit with Catalyst in April 2017. Catalyst’s merger with Samena Capital’s Indian unit was completed in December 2017, resulting in a $50 million initial close of the fund as both firms committed $25 million, according to a statement seen by PDI in January 2018.
This year, at least two Indian private credit investment managers have held final closes on their latest distressed and special situations fund strategies.
The aggregate fundraising amount has been boosted by Edelweiss Alternative Asset Advisors with its second special situations fund sized at $1.3 billion, Edelweiss India Special Assets Fund II (EISAF II), and Kotak Investment Advisors, with its $1 billion sized first special situations vehicle, Kotak Special Situations Fund.
EISAF II was anchored by Caisse de dépôt et placement du Québec, the Quebec City-headquartered Canadian pension fund. Kotak Special Situations Fund was anchored by a $500 million commitment from sovereign wealth fund the Abu Dhabi Investment Authority.