A Kodak Mahindra Bank arm on Tuesday announced it has raised Rs 5,328 crore to invest in infrastructure projects in the country.
Kodak Investment Advisors Ltd (KIA L) is targeting to raise Rs 6,000 crore in total for the Kodak Infrastructure Investment Fund, and this is the maiden close for the platform, according to a statement.
The fund will be focusing on infrastructure credit and this is the first time where a fund is being set up with significant commitments from global investors, the statement said.
Majority of the Rs 5,328 crore fund in commitment has been made by the Canadian Pension Plan Investment Board (CPP IB), while the Asian Infrastructure Investment Bank (AIIB) has pitched in with a USD 100 million (about Rs 828 crore) commitment.
The fund will be providing senior and secured credit, and will be attempting to deliver returns which will be higher than equity to its investors by measuring and pricing risks better, the fund’s Chief Executive Suman Saha said, adding that it will provide credit solutions to stressed infrastructure assets, as well as capital for growth.
“K IIF is a differentiated offering in an otherwise crowded infrastructure investing market dominated by equity investors", said Suman Saha, chief executive, KIIF. It attempts to measure and price risk better than equity, and will deliver superior risk adjusted returns to its limited partners. "It will provide credit solutions to stressed infrastructure assets, as well as capital for growth."
The investment from AIIB is expected to help improve the “mobilization of innovative risk capital from institutional investors," said Dongik Lee, director general, banking department, AIIB.
“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," KIA L’s Managing Director Srini Srinivasan said.
AIIB's Director General in the banking department Dongik Lee said India's infrastructure sector has many assets with operating track records in need of innovative credit solutions. The sectoral expertise of KIA L and Kodak Group's strengths, K IIF is expected to be a vital new source of liquidity which complements the conventional capital available in the sector.
Set up in 2005, KIA L is the alternate asset arm of Kotak Mahindra Group and has raised/managed/advised in aggregate over $6.8 billion across asset classes including real estate, private equity, infrastructure, special situations fund, and investment advisory.
“We are a big believer in India and are building a multi-asset, class alternate asset management business of scale, with an India focus," said Srini Srinivasan, managing director, KIA L. “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."
KIA L has been on a fundraising spree, launching multiple funds across segments. This year, VC Circle reported that the company is also set to foray into venture capital, venture debt and buyout space.
Last month, KIA L received commitments from a unit of Abu Dhabi Investment Authority (ADIA) for its 13th real estate fund, sized $1 billion.
Earlier this year, Kodak Pre-IPO Opportunities Fund announced the first close at ₹1,386 crore and KIA L is also in the process of raising its second new fund.
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