Kotak Mahindra group floats $300-mn infra PE fund

The Kotak Mahindra Group plans to raise $300 million in private equity from domestic and international investors to fund infrastructure projects in India, it was announced in Mumbaitoday .

Japan's Sumitomo Banking Corporation and Canada's Brookfield Asset Management will participate in the fund as cornerstone investors. Along with Kotak, they will contribute up to 22.5 per cent of the funds' capital.

The fund will invest primarily in power generation and transmission, transport (roads, ports, airports) and other infrastructure (water treatment and supply, waste management, gas transmission, distribution and storage facilities) projects and in infrastructure holding companies.

''We are delighted that we have marquee institutions like SMBC and Brookfield investing along with us in the infrastructure fund,'' said C. Jayaram, executive director, Kotak Mahindra Bank. ''They 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 Investment Advisors Ltd., a group company, will manage the domestic fund and Kotak Mahindra (UK) Ltd, will manage the offshore fund. The former currently manages or advises nearly $1.2 billion of alternate assets, while Kotak Mahindra (UK) and its international affiliates manage offshore funds of close to $2.2 billion.

Indian finance minister Pranab Mukherjee, in his recent budget proposal, had said the country would need about $1 trillion in investments in the infrastructure sector over the next five years. With India encouraging international investors to fund mega projects, many foreign groups are firming up plans to bring in funds.