Kotak Investment Advisors Limited (KIAL), on Tuesday marked the close of Kotak Infrastructure Investment Fund (KIIF), a category-II alternate investment fund (AIF) with a corpus Rs 6,000 crore.
KIIF has already received commitments of Rs 5,328 crore from anchor investors including Canada Pension Plan Investment Board and the Asian Infrastructure Investment Bank (AIIB) for the fund.
The fund will invest in operating infrastructure projects by providing senior, secured credit, the company said in a statement.
“KIIF is a differentiated offering in an otherwise crowded infrastructure investing market dominated by equity investors,” said Suman Saha, chief executive, KIIF. “It attempts to measure and price risk better than equity, and will deliver superior risk adjusted returns to its limited partners. It will provide credit solutions to stressed infrastructure assets, as well as capital for growth.”
The investment from AIIB is expected to help improve the “mobilization of innovative risk capital from institutional investors,” said Dongik Lee, director general, Banking Department, AIIB.
“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.
KIAL, set up in 2005, is the alternate assets management and investment advisory business of Kotak Mahindra Group. It has raised/managed/advised in aggregate over $6.8 billion across different asset classes including real estate, private equity, infrastructure, special situations fund, and investment advisory, all led by independent investment teams.
“We are a big believer in India and are building a multi asset class alternate asset management business of scale, with an India focus,” said Srini Sriniwasan, managing director, KIAL. “This fund will play a key role in solving the balance sheet correction issues in infrastructure assets at a time when other sources of capital have dried up.”
KIAL has been on a fundraising spree launching multiple funds across segments. This year, VCCircle reported that the Kotak investment arm, is also in process of raising multiple funds, is also set to foray into venture capital, venture debt and buyouts space.
Last month, KIAL received commitments from a subsidiary of Abu Dhabi Investment Authority (ADIA) for its 13th real estate fund sized $1 billion. Canada’s largest pension fund manager Canada Pension Plan Investment Board (CPP Investments) has also committed Rs 1,850 crore to the first close of Kotak Infrastructure Investment Fund (KIIF).
Earlier this year, Kotak Pre-IPO Opportunities Fund announced the first close at Rs 1,386 crore and KIAL is also in process of raising its second new fund.