Shifting Focus to India for Investment in Private Credit Market 📈
EvolutionX Debt Capital Pte., a joint venture between Temasak Holdings Pte. and DBS Bank, is redirecting its investment strategy towards India from China this year. The goal is to seize a larger portion of India’s expanding private credit market.
Allocation Strategy and Target Returns 📊
– Plans to allocate up to 70% of a $500 million private credit fund to India
– Aiming for high double-digit returns
– Investment horizon of three to four years
Rahul Shah, a partner at the company, mentioned that the firm is looking to enhance its presence in India due to increasing macro concerns in China. Private credit is gaining popularity in India, even with global warnings about risks in the direct lending market, which has been growing rapidly.
Launch of the Fund and Future Plans 🚀
– Fund initiated in 2021 for tech and tech-enabled companies in India, China, and Southeast Asia
– Originally planned to allocate 40% of assets in India
– Invested about $300 million through seven companies, most of which are Indian
– Planning for a second fund as the first fund’s investment limit will be reached in the next two years
– Exploring new funding modes like tax-related payments, buyback of employee stock options, and mergers and acquisitions
The company acknowledges India’s robust economic growth as a magnet for investors, especially amidst China’s economic slowdown. EvolutionX is poised to capitalize on India’s potential while keeping an eye on shifting market dynamics.
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