Neo Asset Management has announced the first close of its INR 2,000 crore private equity fund, called the Neo Secondaries Fund, after raising INR 750 crore from investors.
Earlier this year, the company also reached the first close of its second private credit fund—Neo Special Credit Opportunities Fund II (NSCOF II)—with INR 2,000 crore. This fund is aiming to raise a total of INR 5,000 crore and is registered with SEBI.
The Neo Secondaries Fund is a SEBI-registered Category II Alternative Investment Fund. It focuses on buying secondary shares in unlisted Indian companies that are already making profits (EBITDA positive) and have clear plans to exit the investment within two to four years.
Neo Asset says that launching a late-stage secondary fund helps provide more stable returns and allows existing investors to get their money back as older funds near the end of their investment period.
The fund has already invested in three companies: Noble Hygiene, which makes disposable hygiene products; Purplle, a beauty and personal care platform; and Fractal Analytics, an AI company based in Mumbai.
Neo Asset has also made a multi-asset deal with an Indian venture capital firm, although the name of the firm hasn’t been shared yet.
“Secondaries have outperformed in the US. It has outperformed the public markets by up to 7% per annum. In India, secondaries outperform public markets by 6-8% per annum, which is a healthy outperformance,” said cofounder and chief executive Hemant Daga. “These funds are of relatively shorter duration, unlike a traditional private equity fund.”
Neo was founded in 2021 by Nitin Jain, the former CEO of Edelweiss Financial Services, along with four of his colleagues from Edelweiss.
The company offers financial advisory services to over 1,200 clients, including high-net-worth individuals (HNIs), ultra-HNIs, and multi-family offices.
In August 2023, Neo raised INR 400 crore in equity funding from MUFG Bank and New York-based Euclidean Capital. Peak XV Partners, which had previously invested $35 million in October 2023 also joined this round.
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