Kotak AMC Raises Rs 1,200 Cr in Credit Opportunities Fund

Mumbai, May 15 (PTI) Kotak Mahindra Asset Management Company said that it has raised Rs 1,200 crore to close the first tranche of the 'Kotak Credit Opportunities Fund', and is targeting to raise another Rs 800 crore in over three months, a senior official said on Thursday.

The company is investing Rs 300 crore in a performing credit alternative investment fund (AIF), its chief investment officer Saurabh Tripathi said.

Tripathi said the AIF will capitalise on the inabilities of the existing credit market to serve the fund requirements in specific situations and is aiming to deliver a gross internal rate of return of 14-16 per cent.

Commitments for the AIF, which is the second such vehicle for the AMC, have been raised from ultra high net worth individuals, family offices, corporate treasuries, and institutional investors, he said.

Kotak AMC will be investing Rs 300 crore of the over Rs 2,000 crore targeted by the AIF as sponsor capital, and has already put in around Rs 200 crore on a pro-rata basis as part of the first close, he said.

Stating that the platform is already in talks to deploy around Rs 300 crore of funds to borrowers, he said the overall deployment of the money will be done in 12 months.

The overall demand for private credit, which has been witnessing activity both from AMCs through the AIF structures and also other vehicles, is very high, Tripathi said, adding that last year there were transactions of USD 10 billion in India.

It will seek help from the Kotak group entities in sourcing the potential borrowers and also to get the investors, he said, adding that the possibility of lending together will be rare.

A four-member investment team is being created to handle the deployment aspects, and the plan is to close the fund in the next five and a half years.

In the future, the fund house may look at other strategies beyond performing credit and launch an AIF dedicated to the same, he said.