Tuesday, April 23, 2024

A Private Credit Fund of Funds for HNIs and Family Offices

Dezerv, which was founded in 2021 by Jethwani, Vaibhav Porwal and Sahil Contractor, has launched a ₹600 crore AIF offering – a new fund of funds.

The fund of funds will be for investments in private credit funds, said Sandeep Jethwani, co-founder, Dezerv.

The private credit market has become very popular in the last few years. This was because mutual funds (even credit risk funds) started lowering the credit risk from their portfolios.

“We will invest in around four to six private credit funds and the FoF cannot commit more than 25% to any fund at any point in time,” Jethwani said.

This principle will ensure that the fund is not exposed to concentration risk, a typical feature of individual private credit funds. This makes the offering a compelling one for HNIs and family offices looking to allocate to private credit markets.

Dezerv claims to have touched the ₹5,000 crore mark in assets under management (AUM) and distribution, as of February 2024.

So far, the platform has focussed on public markets with a small area dedicated to investing in startups through a SEBI-registered category-I alternative investment fund (AIF).

With the launch of the fund of funds for private credit funds and a few other products in the pipeline, it is looking to expand its offerings in the private investment space.

Explaining how Dezerv will shortlist the private credit funds, Jethwani said, “We are looking at funds where the pedigree of the fund manager is very strong, have demonstrated a track record and won’t rely on their experience in managing other investment categories.”

“We will also look at the initial few transactions of the funds. These transactions will give us an idea of how these funds will perform in the future,” Jethwani added.

Dezerv had last raised $21 million in its Series A round of funding in August 2022 led by Accel. The company had also raised $7 million in its seed funding round in September 2021 led by Matrix and Elevation.


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