Kotak Investment Advisors closes alternate investment fund KIIF, to invest in operating infra projects 

Kotak Mahindra Group’s alternate assets management and investment advisory vertical Kotak Investment Advisors Limited (KIAL) has announced closing of its category II Alternate Investment Fund (AIF)-- Kotak Infrastructure Investment Fund (KIIF)-- which handled a corpus of around Rs 6,000 crore. KIAL will now invest in operating infrastructure projects by providing senior, secured credit. 

KIIF has already received commitments worth Rs 5,328 crore from anchor investors including Canada Pension Plan Investment Board and the Asian Infrastructure Investment Bank (AIIB). As per Kotak Investment Advisors’ official press release, this is the first time an infrastructure credit fund has been set up with significant commitments from international investors.

Commenting on the development, Kotak Infrastructure Fund CEO Suman Saha 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 assets, as well as capital for growth. We are delighted that marquee international investors have endorsed the strategy and look forward to working closely with them in making KIIF a success.”

Kotak Investment Advisors MD Srini Sriniwasan mentioned that the company is building a multi-asset class alternate asset management business of scale with a focus on India. Sriniwasan added, “Infrastructure is the backbone for an economy and is the key to the government’s plan to make India a $5 trillion economy by 2025. 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.”

AIIB Director General Dongik Lee said that KIIF is likely to be a new source of liquidity that complements conventional capital available in the sector. Lee says, “AIIB’s investment is expected to help improve the mobilisation of innovative risk capital from institutional investors, and we are excited to support the long-term financial sustainability of selected infrastructure companies in India.”

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