Kotak Investment targets $191 mn for fund-of-funds to back PE, VC firms

 Kotak Investment targets $191 mn for fund-of-funds to back PE, VC firms

Kotak Investment Advisors Ltd, the alternative investment arm of Kotak Mahindra Bank, said Tuesday it has hit the road to raise a fund-of-funds to invest in other private equity and venture capital vehicles.

The Kotak India Alternate Allocation Fund aims to raise Rs 1,500 crore (about $191 million), including a greenshoe option of Rs 750 crore.

It will invest in PE/VC funds in multiple sectors, including consumer, technology, healthcare, and financials, as well as across multiple stages, from early stage to growth stage and late stage across different vintages.

The fund also intends to invest some portion into co-investment opportunities available from such investee funds.

Nidhi Chawla, who will manage the fund-of-funds, said the new vehicle intends to provide investors access multiple funds as well as leverage Kotak’s institutional diligence with peer benchmarking data available, coupled with institutional monitoring of long tenure funds.

“The performance difference between best and worst fund managers in PE/VC funds can be as high as 15- 20% IRR, so manager selection is critical,” Chawla said.

Srini Sriniwasan, Managing Director at Kotak Investment, said many marquee fund managers in India have been inaccessible to domestic investors as they raised only offshore capital or had high minimum ticket investment requirements. “With Kotak’s fund-of-funds, we intend to enable access to such funds and increase domestic overall participation in the Indian alternates industry,” he said.

Sumit Upadhyaya

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