Franklin Templeton’s India branch is gearing up to launch a private credit fund, enabling it to offer loans to companies in a market where both banks and non-banking financial companies (NBFCs) are largely hesitant to cater to anyone other than top-rated businesses.
What Happened? According to Bloomberg, Santosh Kamath, the former Chief Investment Officer at Franklin Templeton Asset Management India, will likely manage this new venture. Kamath, known for his fascination with high-yield Indian debt, actively contributed to the construction of India’s market for lower-rated corporate bonds. However, the 2020 coronavirus lockdowns led to the freezing of six funds under his control.
This move also aligns Templeton with global firms like Apollo Global Management, Cerberus Capital Management LP, Varde Partners and The Carlyle Group, which are expanding their operations in one of the world’s fastest-growing economies.
Why the interest? Despite holding a tiny piece of the global $1.5 trillion (₹123.41 lakh crore) private credit assets under management pie, India has seen the most considerable investment volume in Asia in the past five years. The country’s private debt-focused assets under management nearly doubled to $15.5 billion (₹1.27 lakh crore) as of December 2022 from the previous year.
Franklin Templeton is reportedly preparing to apply for a Category II Alternative Investment Fund license from the Securities and Exchange Board of India, which will pave the way for the launch of the private credit fund. The target size for the fund will be determined once they secure the license.
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