The Kotak Mahindra Group has announced the first close of its India-focused infrastructure private equity fund with around $90 million (Rs 490 crore) commitment. Sumitomo Mitsui Banking Corporation (SMBC) of Japan and an affiliate of Brookfield Asset Management have come in as cornerstone investors of the fund called Core Infrastructure India Fund Pte Ltd.
Besides these two and Kotak, the fund has also got commitments from Japan Bank for International Co-operation (JBIC) and an unnamed insurance group, according to a statement issued on Tuesday. Kotak Mahindra (UK) Ltd, Singapore branch, is the investment manager of the fund.
When contacted by VCCircle, Suman Saha, head of the infrastructure advisory team at Kotak Investment Advisors, said, “The total target size of the fund is around $250 million. But as and when there are investors, the fund can do a closing. Hence, there may be more than one additional closing before a final close, but the timing of a closing cannot be predicted at this stage. The final close of the fund is expected in the next 12-15 months.”
The fund will invest in companies engaged in power generation/transmission, transportation (roads, ports and airports), water treatment & supply, waste management, gas transmission, distribution & storage, etc., in India.
Kotak, SMBC and Brookfield have committed in excess of $50 million at first close and also nominated professionals to the investment team and the investment committee.
“This is an important milestone for the Kotak Mahindra Group as we are now in a position to address a significant market opportunity, as well as add a key platform to our existing alternate assets business,” said C Jayaram, joint managing director of Kotak Mahindra Bank.
SMBC is the core financial institution of Japan’s second largest financial services group in terms of market capitalisation, with a significant presence in infrastructure project finance globally.
Brookfield is a global alternative asset manager with more than $175 billion in assets under management. For over 100 years, it has owned and operated assets with a focus on property, renewable power, infrastructure and private equity.
For JBIC, the policy financing financial institution of the Japanese government with a track record of financing infrastructure globally, this investment marks its first ever direct commitment to a fund dedicated to financing only Indian infrastructure projects.
This is another proof of partnership between Kotak and the Japanese financial services group SMBC. Last December, Kotak Mahindra Capital Company, the investment banking subsidiary of Kotak Mahindra Bank, entered into an exclusive strategic alliance with SMBC and SMBC Nikko Securities (a wholly owned subsidiary of SMBC) for cross-border M&A advisory services between India and Japan.
(Edited by Sanghamitra Mandal)