Private credit secondaries gain traction as investors seek visibility on returns

That could change as more private-credit managers build multiple fund vintages and earlier funds approach maturity, creating a larger pool of established assets for investors to buy.

Seasoned credit draws investors

The appeal is greater visibility into risk. Investors can assess how a borrower has performed since the original investment, whether leverage has fallen and whether the business has survived a period of volatility.

“We are seeing a lot of opportunities for takeouts,” said Aakash Desai, Chief Investment Officer and Head of Private Credit, 360 ONE Asset. “Today, compared to two years ago, the amount of refinancing has increased. That’s a function of more confidence in the market and more capital flows, and an increased amount of diligence on underlying credits.”

Desai said global investors are also enquiring about established Indian credit exposures. “Global buyers are more evolved—they want to buy mature, seasoned assets…A lot of global investors are reaching out enquiring about assets that stood the test of time.”

Others such as Axis and ICICI Prudential have also moved into successive funds while their earlier vintages mature, giving investors greater visibility into underlying assets and realised returns.

The global market illustrates the potential.

Earlier this year, Ares Management raised $7.1 billion for its debut Ares Credit Secondaries Fund, one of the largest dedicated institutional credit-secondary funds globally. Coller Capital’s dedicated credit-secondary fund had exposure to about 1,660 portfolio companies across 34 managers as of March 2026. In 2024, BlackRock reportedly prepared a $1.3 billion private credit continuation fund.

India, however, remains at an earlier stage.

A nascent market

In developed markets, private-credit secondaries typically involve an existing investor selling its exposure to another investor, often to meet liquidity needs, rebalance a portfolio or exit as a fund approaches maturity.

That is not yet the norm in India, said Vishal Bansal, partner at EY. Much of what is described as secondary activity instead involves an investor selling down shortly after the original transaction or a borrower refinancing existing debt

“In India, the sell down generally happens either immediately at the time of transaction closure or within a short span of the investment, say three to six months,” Bansal said. Unlike developed markets, there are generally no “super profits” being made by investors through such early sell-downs, he added.

In August, Mint reported that Shapoorji Pallonji (SP) Group's record $2.7 billion bond issue is finding a new class of investors as private wealth managers are parcelling out pieces of the unrated, unlisted debt issue, selling investors a future payoff tied to Tata Sons' potential initial public offering (IPO).

Refinancing is a more established route for existing credit exposure to change hands, particularly when a borrower’s credit profile improves. For instance, Tata Capital’s ₹2,300-crore refinancing of Jayaswal Neco provided an exit to Edelweiss Alternatives in December 2025. Similarly, Kesoram raised about ₹1,850 crore in February 2024 from Tata Capital group and Hero Fincorp to repay existing high-cost debt raised from Goldman Sachs, Cerberus and Edelweiss in 2021.

Nachiket Naik, head—structured credit, Alternates by Axis AMC, said the evolving secondary market is also helping address the traditional problem of illiquidity in performing private credit.

“Performing credit funds with fixed-rate NCD portfolios are able to provide investors with determinateness in terms of both the quantum and timelines of returns once the portfolio is fully deployed,” Naik said.

Once a fund has deployed its capital, investors have greater visibility into how much they are likely to receive and when. That makes it easier for a prospective buyer to value the portfolio based on its known risk, return and maturity profile without demanding a huge discount, Naik said.

“We are beginning to see secondary activity in private credit manifest itself in different forms in India — through refinancing of seasoned exposures, co-investment and syndication with family offices, and hold-and-downsell models,” said Piyush Chande, Senior Fund Manager, Private Capital, ICICI Prudential AMC.

“These are not necessarily driven by credit concerns; often they are simply mechanisms to create liquidity, manage portfolio concentration and broaden the investor base for an existing credit. As the market matures and more transactions season, we expect such portfolio-level churn to become a more natural feature of the private-credit ecosystem.”

Supply constraint

“Appetite exists on the demand side; the supply side is the real question,” said Pranob Gupta, managing director and business head for India alternatives at Lighthouse Canton. Differences in fund processes, limited information sharing, lack of uniform rating frameworks and managers’ preference for originating primary deals remain constraints, he said.

Globally, the market is much more developed. Evercore’s 2025 Credit Secondary Market Survey, published in January, said global credit-secondary volumes nearly doubled to $20 billion in 2025.

India could eventually follow that path as more funds mature. The first wave of domestic AIFs launched between 2018 and 2022 may be approaching maturity, potentially creating more natural sellers, Gupta said.

Desai expects the shift to become more visible over the next three to five years, as managers build track records across multiple credit cycles.

“Today, someone like us has institutionalized our credit thesis and risk framework,” he said. As more managers demonstrate that their portfolios can withstand stress, investors will become more comfortable buying seasoned assets—and portfolios and baskets of assets could eventually begin trading more actively.