Why the rush for private credit?

In this Current Account podcast, Hamsini Karthik talks to Nilesh Dhedhi, MD & CEO, Avendus Finance Private Limited, about the world of private credit, its relevance for different sectors, and its potential for growth in the financial landscape.

The conversation turns to the relevance of private credit for startups and fintech companies. Nilesh highlights that private credit is well-suited for these businesses, which often have unconventional business models and may not meet the criteria for traditional bank loans. He also mentions the emergence of private credit funds, particularly venture debt funds, focused on supporting the startup ecosystem.

Hamsini and Nilesh discuss the role of private credit in providing exits for private equity investors. Nilesh explains that private credit can bridge the gap in valuation and timing mismatches, offering flexibility to businesses looking to transition to an IPO or other funding sources.

They delve into the competitive landscape of private credit, mentioning that banks, mutual funds, NBFCs (Non-Banking Financial Companies), and global private equity funds are all players in the market.

Nilesh provides insights into the allocation of investments in private credit, emphasising the importance of track records for fund managers and the variety of products available to investors. He discusses the different yield ranges that investors can target within the private credit space.

The conversation also touches on the growth of private credit in recent years, with a focus on product offerings across various yield spectrums. Nilesh discusses the evolution of private credit products, catering to different risk appetites and return expectations.

Listen to the first part here

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