Kotak Alternate Asset Managers Ltd (KAAML), the alternative assets arm of Kotak Mahindra Group, aims to raise up to $2 billion for a new private credit fund to tap the growing demand for such products in India, its chief executive told Bloomberg in an interview.
The fund will offer a range of financing options, including acquisition funding, equity-backed loans, and annuity assets that generate steady cash flow, said Lakshmi Iyer.
“We’re seeking an investment return in the 18%-20% range,” she said. “Structured credit instruments will be the underlying, with tenors ranging from four to seven years.” The firm’s Strategic Situation Fund I, for instance, delivered over 20% of compound annual growth rate in local currency terms since it was launched in 2019, she added.
KAAML was established in early 2005 and focuses on alternative asset management and investment advisory businesses. It has raised, managed, or advised over $22 billion across different asset classes, including private equity, real estate, infrastructure, special situations, private credit, and investment advisory.
The private credit segment in India has been witnessing growing traction by capitalising on the financing gap left by traditional lenders. Some prominent players in the industry include Vivriti, Edelweiss, Incred, Innoven, Anicut Capital, Neo Asset Management, BPEA Credit, and 360 One Credit, among others.
According to a report by EY, in the past 2.5 years, private credit deals have totalled over $20 billion in India, with a significant chunk directed towards the real estate sector.
In February, the government-backed domestic infrastructure fund, National Investment & Infrastructure Fund (NIIF), said it is seeking to raise a $2-billion private credit fund.
Separately, private credit fund manager Vivriti Asset Management, a subsidiary of mid-market lender Vivriti Capital, is on track to close its third private credit fund, targeting Rs 1,500 crore ($174 million) by mid-to-late 2025, a top executive at the firm told DealStreetAsia in January.
Kotak’s proposed fund will be open for subscription to both offshore and local investors, according to Iyer.
