DMI Alternatives, a reputed alternative assets management firm, has been able to close a major capital raise on its latest dedicated fund. The company has announced that it will close $120 million in a corporate private credit fund. This large investment vehicle is specifically aimed at capital provision of performing and cash-flowing Indian firms. The successful raise has a significant emphasis on the exploding need for flexible credit solutions by established companies operating in the most dynamic major economy in the world. Harein Uppal will lead the strategic direction, as well as the implementation of this new fund, a positive sign of the targeted manner in which the leadership has set its goals to ensure that the impact of this fund is felt in the dynamic Indian market.
Operational strategy and a dedicated focus
The operational strategy of the new corporate private credit fund is carefully designed to offer more than capital. DMI Alternatives will offer custom-made financing options that are specifically designed to suit Indian firms that demonstrate a good base for sustainable growth. This strategy recognises the special and sophisticated financing needs of mid-market businesses that are the heart of the target population of the fund.
The private credit approach targets businesses that have a strong foundation and are on a definite growth path, and seeks to help them achieve long-term growth and prosperity. The fund will use both debt and hybrid forms to deploy flexible capital to address the varied needs of these enterprises using a wide range of instruments. This flexibility allows financing to be maximised in the context of the balance sheet and growth strategy of a particular portfolio company.
The fund has and will ensure that it has a special focus on several key areas, which are considered critical to the ongoing economic performance of India. These are healthcare, technology, business services, manufacturing, and financial services. These sectors have been particularly selected since they will most likely enjoy the secular tailwinds, or long-term, non-cyclical growth drivers that are already driving overall economic growth in India. By focusing on these high-growth regions, the fund will be able to pinpoint its returns to the macroeconomic direction of the country and help the companies that are essentially moving the economic story of India.
Expansion in India’s economy
The closure of the $120 million fund is highly symbolic of the structural changes that are taking place in the Indian financial scene. The investment reflects the prevalent and growing need of Indian corporates to get capital that provides greater flexibility as opposed to what is being provided by the available traditional sources of finance. India is the fastest-growing large economy in the world and is enjoying the convergence of favourable financial conditions.
These are continuous structural reforms that are enhancing the business environment, continued high domestic consumption, which is a key driver to the economy, and an evident growth in the flow of capital, both domestic and international, to India-related investments. These macroeconomic drivers provide a perfect condition for flexible credit application.
The private credit asset form is becoming a permanent and vital source of capital in this fast-changing environment. It is also proactively supplementing banks and public markets, instead of just competing with them, by bridging major capital stack gaps. This position also guarantees that cash-flowing and well-managed companies are able to avail the required liquidity in addition to tailor-made financing to take the growth opportunities in the middle market segment.
The investor response to the rise of DMI Alternatives, which was strong, serves to support the view that the sources of financing of the Indian economy through private credit are expected to be the instruments of the national economic growth in the upcoming years and the establishment of a presence of India in the international financial arena. The performance of the fund shows how the market trusts in the viability and need of private credit solutions in the long term.
Conclusion
DMI Alternatives is organised in the form of alternative asset management companies, and its operations include three central strategies, which offer a holistic platform of investment. The third pillar of this multifaceted strategy is the success of the $120 million corporate private credit fund. Its niche focus of offering financing solutions to performing and cash-flowing Indian companies with good fundamentals, in terms of flexible debt structures and hybrid structures, puts DMI Alternatives right in the middle of the Indian alternative finance boom. This capital inflow will be crucial in helping the growth of middle market firms within key industries like technology and healthcare to ensure that they get the custom-made, sustainable financial support that they will need to realise India’s strong economic tail winds.
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