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The Kotak Mahindra Group has announced that it is seeking to raise private equity funds of about $300 mn from both domestic and international investors to invest in infrastructure projects in India. The funds will invest primarily in power generation/ transmission, transport (roads, ports, airports) and other infrastructure (water treatment & supply, waste management, gas transmission, distribution & storage facilities) projects and in infrastructure holding companies.

Kotak Investment Advisors Ltd., a group company, will manage the domestic fund and Kotak Mahindra (UK) Ltd, another group company, will manage the offshore fund. Kotak Investment Advisors currently manages or advises nearly $1.2 billion of Alternate Assets. Kotak Mahindra (UK) and its international affiliates manage offshore funds of close to $2.2 billion.

Sumitomo Mitsui Banking Corporation (SMBC) and Brookfield Asset Management (Brookfield) will participate in the Fund as Cornerstone Investors. The three entities, Kotak, SMBC and Brookfield, together will contribute up to 22.5% of the Funds’ capital.

SMBC is one of the largest banks in Japan and is a leading infrastructure advisor and project financier, while Brookfield is a leading global real estate, renewable power and infrastructure asset owner, operator and manager with assets under management of over $100 billion, which includes over $ 30 billion in renewable power and infrastructure.

Mr. C. Jayaram, Executive Director, Kotak Mahindra Bank said, “We are delighted that we have marquee institutions like SMBC and Brookfield investing along with us in the Infrastructure Fund. SMBC and Brookfield will bring world-class, complementary experience and knowledge to the Fund. Individually and collectively, the three entities strongly believe in the long-term growth prospects of the India infrastructure sector.”

Kotak has nominated Mr. Suman Saha to head the Investment Team. Suman has over 17 years of diverse experience in the financial services industry. He was earlier Executive Director and Co-Head, Equity Product Group at Kotak Investment Banking where he was responsible for leading project finance advisory transactions and capital market offerings and has worked extensively with infrastructure companies in India.

Mr. Saha said, “Indian infrastructure projects require a significant amount of external capital. While some of the financing will come from the capital markets, a lot of the   early–stage financing has to be sourced from long–term capital providers such as private equity funds. We are creating a platform within the Kotak Mahindra Group that can help address this need for long-term capital, while at the same time giving investors access to one of the country’s most promising investment stories.

“The ability to access the right projects and the capability to evaluate and manage the investment are the two key parameters for an infrastructure fund. The Kotak Mahindra Group, with its long-standing developer relationships, will play a critical role with the former, while the combined expertise and experience of the three partners positions us nicely to address the latter.” added Mr. Saha.

“To start with, we are looking to raise $300 million from the international and domestic markets,” added Mr. Jayaram. “In the medium to long-term, our aim is to build a substantial presence in this space.”

Tags:
Brookfield Asset Management, C. Jayaram, distribution, funds, gas transmission, India, infrastructure, Kotak Investment Advisors, Kotak Mahindra, power generation, power transmission, private equity, storage, Suman Saha, Sumitomo Mitsui Banking Corporation, transport, Waste management, water supply, water treatment