Kotak Alternate Asset Managers Ltd CEO Lakshmi Iyer.
Credit: X/@Lakshmi1876
By Saikat Das
Kotak Alternate Asset Managers Ltd aims to raise up to Rs 17,116 crore ($2 billion) for a new private credit fund to tap the growing demand for such products in India, according to its chief executive officer.
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 per cent-20 per cent 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 per cent of compound annual growth rate in local currency terms since it was launched in 2019, she added.
Kotak Alternate manages about Rs 1,71,160 crore ($20 billion), with over Rs 51,348 crore ($6 billion) spread across 14 private credit funds, Iyer said. Overseas investors, including family offices and wealthy individuals, account for the bulk of the assets.
India’s private credit market is expanding, with investments reaching Rs 78,733.60 crore ($9.2 billion) across 163 deals last year, according to Ernst & Young. However, increasing competition is making it harder to execute deals and may impact credit quality, the report warned.
Kotak’s proposed fund will be open for subscription to both offshore and local investors, according to Iyer.