Kotak Mahindra Asset Management Company announced the first close of its maiden performing credit fund at Rs 1,200 crore ($140 million), according to a statement issued on Thursday.
The fund, named Kotak Credit Opportunities Fund, has a hard cap of Rs 2,000 crore. However, Kotak Mahindra AMC did not disclose the size of the greenshoe option.
In December, the Mumbai-based asset manager had announced plans to launch a private credit vehicle in the January-March quarter.
“We find acceptance and need of enabler strategies like performing credit under the AIF platform, especially for emerging corporates--both in terms of acting as solution capital, while providing investment opportunities to investors," said Saurabh Tripathi, chief investment officer, private credit at Kotak AMC.
The Category-II AIF vehicle, which is registered with the Securities and Exchange Board of India (SEBI), is mandated to invest in performing credit opportunities in emerging companies with profitable operations and stable cash flows. The primary use of this funding is to service the company’s existing financial obligations.
The fund’s investment strategy appears largely sector-agnostic. However, the company did not disclose the number of investments it plans to make from the fund. Typically, performing credit funds in India aim for a gross internal rate of return (IRR) in the range of 14-16%.
According to media reports, the asset manager will contribute about 20% of the fund’s corpus as sponsor commitment. Other limited partners (LPs) in the fund include high-net-worth individuals (HNIs), ultra-high-net-worth individuals (UHNIs), family offices, corporate treasuries, and institutional investors. This is notable, given that fund managers often struggle to raise institutional capital in the first scheme of a new strategy.
Meanwhile, Kotak’s alternative investment business is also active in real estate (with total commitments of about $3.5 billion), special situations, private equity, and infrastructure funding.
According to its website, Kotak Mahindra AMC reported assets under management worth Rs 492,719 crore as of December 2024.
