Sundaram Alternates’ Emerging Corporate Credit Opportunities Fund (ECCO) – 1 | CAT II AIF

The investment objective of Sundaram Alternates’ Emerging Corporate Credit Opportunities Fund (ECCO) – 1 | CAT II AIF is that it shall focus on structured credit needs of small and mid-sized corporates. This is a space that has an estimated ~USD 4-7 billion credit demand in India.

The fund may access a wide range of credit possibilities thanks to secured financing across varied industries, which helps it generate a gross portfolio IRR of between 16% and 18%.

The investment philosophy of Sundaram Alternates’ Emerging Corporate Credit Opportunities Fund (ECCO) – 1 | CAT II AIF is that the fund will primarily invest in high yielding credit instruments of operating companies and /or sponsors where capital needs cannot be met by conventional lenders and where attractive risk-adjusted returns are available.

With an investment size of Rs 50-75 Cr per deal, a single investment exposure is capped at 10-15% and a single industry exposure is capped at 25%.

Sundaram Alternates’ Emerging Corporate Credit Opportunities Fund (ECCO) – 1 | CAT II AIF will have a diversified sectoral mix of investee companies with focus areas being manufacturing (within MSME, SME where access to bank credit is harder), financial inclusion opportunities, opportunistic interim financing opportunities that can enhance portfolio yields. The investments of the Fund will generally be backed by tangible assets of the Investee Company and/or comfort from the promoters of the Investee to enhance capital protection.

The fund offers portfolio diversification by investing across Auto & Engineering, Chemicals / Pharma, Textiles, Consumer & FMCG, Healthcare, Logistics, IT, and Hospitality.

ECCO – I CAT 2 AIF will have Climate, Environmental, Social and Governance (CESG) intervention as part of portfolio construction – Build CESG into the investment underwriting templates and the investment evaluation framework.