Vivriti Asset Management Returns Over Rs 3,400 Crore to Investors

Vivriti Asset Management (VAM), a private credit asset manager based in India, has successfully concluded its Vintage II funds, which include three performing credit schemes. The completion occurred within the planned fund lifecycle and according to the targeted objectives. This milestone marks a significant achievement as VAM has now returned in excess of Rs 3,400 crore to investors through a combination of capital repayments and income distributions spanning two fund vintages.

The Vintage II funds were launched in early 2022 and reached their final close by September 2023 after securing all committed capital. These funds attracted a diverse range of investors, including institutional participants such as insurance companies and all-India financial institutions (AIFIs), alongside private investors like family offices and high-net-worth individuals (HNIs). This mix highlights the growing interest in private credit as an asset class in the Indian market.

Over the years, Vivriti Asset Management has focused on offering funds with conservative to moderate risk profiles. For the Vintage II funds, the firm raised Rs 1,700 crore in investor commitments and deployed more than Rs 3,500 crore across over 45 companies. These portfolio companies are spread across multiple sectors, including infrastructure (roads, ports, airports, digital infrastructure), clean energy, manufacturing (fertilizers, electronic devices), and services such as logistics, co-working spaces, financial services, and enterprise software-as-a-service (SaaS).

The Vintage II funds delivered strong performance, returning more than Rs 2,260 crore in capital and income to investors. The moderate risk scheme achieved a gross internal rate of return (IRR) of approximately 15 percent, while the conservative scheme, which invests solely in portfolio companies with an 'A' rating, generated a gross IRR close to 12 percent. When accounting for fees and expenses, net returns were around 13 percent for the moderate scheme and 10.5 percent for the conservative scheme.

Vineet Sukumar, Founder and Managing Director of Vivriti Asset Management, emphasized the role of private credit in filling a financing gap that exists between traditional bank lending and equity capital. He explained that many fundamentally sound businesses, especially those with steady cash flows, require more flexible capital structures that conventional lending does not always provide. VAM’s approach involves carefully structuring transactions to ensure returns are backed by robust cash flows, while also including protections against potential downside risks through security interests and portfolio diversification across sectors and businesses.

Soumendra Ghosh, Chief Investment Officer at Vivriti, noted that the fund repayments and overall results underscore the value private credit can add to investor portfolios. He pointed out that VAM’s Rs 3,400 crore returned over seven years aligns well with investor expectations and illustrates private credit’s ability to generate steady income, predictable capital repayment, and consistent returns with relatively low volatility. Ghosh also highlighted the importance of offering flexible capital solutions to meet the financing needs of the companies in VAM’s portfolio.

The successful exits from the Vintage II funds come amid a challenging backdrop of fluctuating business conditions, changing policy rates, liquidity shifts, and geopolitical uncertainties. Despite these headwinds, Vivriti’s performance demonstrates the viability of private credit in India as an alternative investment option that can deliver attractive risk-adjusted returns.

As the Indian financial market continues to evolve, private credit managers like Vivriti are playing an increasingly prominent role in bridging gaps in corporate financing. Their ability to offer tailored financing options is becoming a key complement to traditional banking and equity markets, especially for mid-sized and growing enterprises.

Disclaimer: This article was authored by Veer Sharma, who is not a SEBI-registered Research Analyst or Investment Adviser. Neither Veer Sharma nor his relatives hold financial interests in the companies discussed as of the publication date. Views mentioned are those of the respective registered analysts or brokerages and have been reproduced with proper attribution. Readers should refer to original research reports and make investment decisions based on their own analysis. Brokerage disclaimers apply.