What is Private Credit?
Private Credit funds provide structured debt financing to mid-market companies, real estate developers, and NBFCs that cannot access public debt markets efficiently. They offer higher yields than traditional bonds while maintaining security through first charges, promoter guarantees, and pledged collateral.
- Predictable Income: Quarterly interest distributions at 12–18% annualised
- Secured Lending: First or second charge on assets/receivables/equity
- Senior in Capital Stack: Priority over equity investors in liquidation
- Diversification: Low correlation to listed equity markets
- Inflation Protection: Floating rate instruments adjust with market rates
Credit Structure
Private credit investments are carefully structured for capital preservation:
- Comprehensive credit due diligence: financial, legal, and sector analysis
- Security package: mortgage on property, pledge on shares, personal guarantee
- Covenants: minimum DSCR, leverage ratios, and reporting requirements
- Periodic interest collection: monthly or quarterly distributions to investors
- Monitoring: quarterly performance reviews and site visits