Sundaram Alternates has announced the launch of Performing Credit Opportunities Fund (PCOF) - Series I, a close ended Category II AIF.

The primary investment objective of PCOF is to generate attractive risk-adjusted returns by targeting high-yielding debentures (both listed and unlisted) and mezzanine securities. The fund focuses on mid-market companies, particularly in the MSME, SME, Fintech, Manufacturing, and Services sectors, with revenues ranging from Rs 250 to 5,000 crores.

The investments will be supported by a range of security structures, including strong business cash flows, hard assets, guarantees, and share pledges, ensuring a robust risk management framework.

A hallmark of the PCOF is its skin-in-the-game commitment from sponsors, who will contribute up to 15% of the fund size, demonstrating confidence in the fund’s success. The fund will distribute quarterly income to investors, providing a steady cash flow. The fund will recycle principal repayments during the investment period to enhance returns for investors, with the goal of commencing capital distributions from Year 4, according to a press release.