Northern Arc Capital’s subsidiary, NAIM, has achieved the first close of its new Northern Arc Diversified Debt Fund, raising over ₹400 crore. The sector-agnostic AIF targets a 16% XIRR and holds an AA(SO) rating. Simultaneously, the firm announced the successful maturity of its India Impact Fund, which delivered a 14.59% gross XIRR. This highlights the company's strong execution in private credit asset management, a key pillar of its financial services platform.
Northern Arc Capital Subsidiary Secures ₹400 Crore for New Debt Fund
Northern Arc Investment Managers (NAIM) has achieved the first close of its new debt fund with over ₹400 crore raised. The firm also reported a 14.59% gross XIRR upon the maturity of its Northern Arc India Impact Fund.
Reader Takeaway: Strong performance in private credit management reinforces Northern Arc’s asset management capabilities despite potential market risks.
What just happened
Northern Arc Investment Managers Private Limited (NAIM), a subsidiary of Northern Arc Capital, has announced the first close of the 'Northern Arc Diversified Debt Fund,' a Category II Alternative Investment Fund (AIF). The fund has already secured over ₹400 crore against a target corpus of ₹1,500 crore, with an additional ₹500 crore greenshoe option. The fund carries an AA(SO) rating from CareEdge and aims for a 16% XIRR over its five-year tenure. Simultaneously, the company marked the maturity of its 'Northern Arc India Impact Fund,' which supported 60 businesses through a deployment of over ₹1,398 crore.
Why this matters
The successful fundraise and maturity of legacy funds validate Northern Arc Capital's core competency in risk-adjusted private credit. Since 2014, the subsidiary has launched 15 funds, with seven maturing successfully. These matured funds have delivered a weighted average XIRR exceeding 14.5% with zero principal loss. The consistent track record in managing ₹10,000 crore in principal and coupon distributions strengthens investor confidence in the parent company's broader financial platform.
Management view
Ashish Mehrotra, MD and CEO of Northern Arc Capital, noted that the fund launch underscores continued investor demand for private credit. He emphasized that the firm remains focused on disciplined credit selection and rigorous risk management to drive portfolio diversification.
What to track next
Investors should monitor the total fundraising progress for the new debt fund and further updates on asset deployment. Performance milestones of the newly launched fund will be critical to sustaining the company’s reputation in the private credit space.