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Neo Asset Management has announced the first close of its ₹2,000 crore private equity fund, the Neo Secondaries Fund, marking a significant milestone in India’s alternative investment landscape. With ₹750 crore already raised, the fund is poised to reshape how secondary stakes in unlisted Indian companies are acquired and monetized. This SEBI-registered Category-II Alternative Investment Fund (AIF) is designed to offer liquidity to existing investors and generate visible returns over a shorter investment horizon.
Key highlights from the fund’s launch
1. Fund structure and investment thesis
- The Neo Secondaries Fund focuses on acquiring secondary stakes in profitable, EBITDA-positive unlisted Indian companies
- It targets businesses with clear exit pathways within two to four years, offering investors faster liquidity compared to traditional private equity funds
- The fund is structured to capitalize on late-stage opportunities, where visibility on performance and valuation is higher
2. Investor backing and capital deployment
- The first close of ₹750 crore includes commitments from marquee investors such as Peak XV Partners, MUFG Bank, and Euclidean Capital
- Neo Asset Management, the asset management arm of Neo Group, oversees more than ₹13,500 crore across private equity, credit, and infrastructure
- The fund has already deployed capital into three companies: Noble Hygiene (disposable hygiene products), Purplle (beauty and personal care marketplace), and Fractal Analytics (AI solutions firm)
- A multi-asset deal has also been signed with an unnamed Indian venture capital firm
3. Market rationale and performance outlook
- Secondary funds have historically outperformed public markets by 6–8 percent annually in India, and up to 7 percent in the US
- These funds offer shorter durations and more predictable returns, making them attractive to family offices, ultra-high-net-worth individuals, and institutional investors
- The strategy helps unlock value from mature portfolios nearing the end of their fund life, providing liquidity to early-stage investors
4. Leadership and strategic vision
- Neo Asset Management was founded in 2021 by Nitin Jain, former CEO of Edelweiss Financial Services, along with four colleagues from Edelweiss
- Hemant Daga, co-founder and CEO, emphasized the fund’s role in bridging liquidity gaps and offering differentiated investment avenues
- Nitin Agarwal, formerly head of India operations at TPG NewQuest, now leads Neo’s private equity vertical, bringing deep expertise in secondary transactions
5. Broader implications for India’s PE ecosystem
- The launch of Neo Secondaries Fund reflects growing maturity in India’s private equity market, where secondary transactions are gaining traction
- It signals a shift toward more flexible, investor-friendly structures that prioritize liquidity and performance visibility
- The fund’s success could catalyze similar vehicles, expanding the scope of secondary investing in India
6. Future roadmap and fund trajectory
- Neo aims to complete the full ₹2,000 crore raise in the coming quarters, with additional closes expected based on deal flow and investor appetite
- The fund will continue to target high-quality companies with strong fundamentals and clear exit strategies
- Neo’s broader strategy includes expanding its footprint across private credit and infrastructure, positioning itself as a full-spectrum alternative asset manager
Conclusion
Neo Asset Management’s first close of its Neo Secondaries Fund marks a pivotal moment in India’s evolving private equity landscape. By offering a shorter-duration, performance-visible investment vehicle, the fund caters to a growing demand for liquidity and strategic exits. With strong investor backing and a focused deployment strategy, Neo is well-positioned to lead the next wave of secondary investing in India.
Sources: Economic Times, MSN India, Entrepreneur India, Head&Tale, Neo Asset Management official site
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