Neo Asset Marks Final Close Of Credit Fund At INR 2,575 Cr

SUMMARY

The fintech AMC's maiden Neo Special Credit Opportunities Fund is a Category II AIF via which it aims to back profitable entities

Neo claims to have backed 12 companies and made two exits within a time span of 15 months via the fund

It is looking to deliver an internal rate of return (IRR) of about 22-24% to its investors via the investments made from the fund

Fintech Neo group’s asset management arm Neo Asset Management has marked the final close of its maiden special credit opportunities fund at INR 2,575 Cr (around $308 Mn).

The company raised the funds from high net worth individuals (HNIs) and multiple family offices.

The fund, Neo Special Credit Opportunities Fund, is a Category II AIF (alternate investment fund) via which Neo aims to back profitable entities with custom credit solutions.

With the fund, the company has backed 12 companies and made two exits within a time span of 15 months, it said.

It further looks to deliver an internal rate of return (IRR) of about 22-24% to its investors via the investments made from the fund.

“Our structured credit solutions are designed to generate significant value for our investee companies, while offering investors a diverse array of opportunities – backed by cash flows and collateral,” the fund’s manager and Neo’s CIO Puneet Jain said.

Founded by Nitin Jain and Hemant Daga in 2021, Neo is a financial advisory firm that helps investors via its four verticals, wealth advisory, asset management, multi-family offices and a wealth management platform for independent advisors.

It claims to be advising more than 1,500 investors with over INR 30,000 Cr assets under administration (AUA) along with controlling INR 6,000 Cr assets under management (AUM).

The development comes about eight months after Neo raised $35 Mn from existing backer Peak XV Partners in October. Back then, the company said it intends to leverage the fresh capital to develop its wealth management arm and deepen its asset management franchise model.

The company’s asset management business sees it focus on delivering inflation-beating returns without the volatility of equity markets. In this space, the company competes with Jio Financial Services, Bajaj Finserv Asset Management, NJ Mutual Fund, WhiteOak Capital Mutual Fund, Edelweiss Asset Management, among others.

The Mumbai based company is targeting to carve a piece of the pie in the total assets under management of the Indian mutual fund industry, which was at a size of INR 46 Lakh Cr back in September last year.

While incumbents have a strong foothold in the industry, new age startups are also vying for a space. Other fintech startups like Zerodha and Groww have also forayed into asset management recently.

Recently, Groww’s AMC arm, Groww Mutual Fund launched India’s first Nifty Non-Cyclical Consumer Index Fund. The fund, an open-ended scheme, seeks long-term capital appreciation by investing in equity and equity-related instruments of Nifty Non-Cyclical Consumer Index.

Besides, Zerodha’s AMC arm, Zerodha Fund House, launched three mutual fund schemes, shortly after receiving SEBI’s go-ahead, back in October.