Kotak garners nearly 90% of target corpus in interim close of infra PE fund

 Kotak garners nearly 90% of target corpus in interim close of infra PE fund

Kotak Investment Advisors Ltd (KIAL), the alternative investment arm of Kotak Mahindra Bank, said Tuesday it has marked an interim close for its new infrastructure dedicated fund.

The PE firm said it has garnered commitments of Rs 5,328 crore ($646 million) for Kotak Infrastructure Investment Fund (KIIF) from anchor investors including Canada Pension Plan Investment Board (CPPIB) and the Asian Infrastructure Investment Bank (AIIB).

This means the fund, a category II Alternative Investment Fund, has secured almost 90% of its target corpus of Rs 6,000 crore ($728 million). The fund will invest in operating infrastructure projects by providing senior, secured credit.

This comes a month after The Capital Quest first reported that the infrastructure fund marked an interim close with commitments from AIIB and CPPIB. CPPIB has committed Rs 1,850 crore (C$310 million or $226 million).

The interim closing comes as Kotak Investment has seen its assets under management rocket 40% over the last year to around $3.4 billion as it raised its maiden pre-IPO fund, floated a fund-of-funds to back other PE, VC firms and raised a large fund in partnership with ADIA.

Suman Saha, CEO, Kotak Infrastructure Fund said, “KIIF is a differentiated offering in an otherwise crowded infrastructure investing market dominated by equity investors. It attempts to measure and price risk better than equity, and will deliver superior risk adjusted returns to its LPs. It will provide credit solutions to stressed infrastructure assets, as well as capital for growth.”

Dongik Lee, Director General, Banking Department, AIIB said, “India’s infrastructure sector has many assets with operating track records in need of innovative credit solutions. With the sectoral expertise and franchise strengths of KIAL and Kotak Group, KIIF is expected to be a vital new source of liquidity which complements the conventional capital available in the sector.”

He added that AIIB’s investment is expected to help improve the mobilization of innovative risk capital from institutional investors.

Vivek Sinha

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