(Bloomberg) -- Indian money manager Neo Asset Management raised 25.75 billion rupees ($308 million) in its maiden private credit fund, as one of Asia’s fastest growing markets for such lending expands.

The fund called the Neo Special Credit Opportunities Fund aims to lend to companies operating profitably and targets about a 22%-24% rate of return for investors on a gross basis, Neo said in a statement. The fund saw a strong response from high net worth individuals and family offices, it said. 

Neo Asset closed the fund at a time when India is a hotspot in Asia for private credit, which has become a serious rival to mainstream lending in many markets worldwide. Global players including Cerberus Capital Management LP are looking to expand in India’s private credit market, as they search for opportunities in one of the world’s fastest-growing major economies.     

There were 108 private credit deals in India amounting to $7.8 billion in 2023, up from 77 deals totaling $5.3 billion in the previous year, according to an Ernst & Young report in February.

The Neo fund has already made 12 investments and seen two successful exits in the past 15 months while raising cash. All investments in Neo’s fund are backed by collateral, according to the firm. 

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