Uday Kotak plans family office to invest in assets but spurns debt, crypto
Mumbai: The family of Uday Kotak, billionaire managing director of Kotak Mahindra Bank Ltd., is setting up an office to invest in assets including private equity, stocks, and real estate worldwide.
“The funds will be deployed in asset classes other than debt and crypto currencies,” Venkat Subramanian, who will be managing the family office, said in an interview in Mumbai last week. “We will also stay clear of any investment opportunities that will bring us in direct competition with the bank.”
While Subramanian didn’t disclose a figure, Kotak has about $1.2 billion in cash and investable assets, according to the Bloomberg Billionaires Index. Most of the money was raised when he cut his stake in the bank to meet regulatory requirements.
The Mumbai-based banker, whose $10.3 billion fortune makes him the eighth-richest person in India and the wealthiest banker in Asia, held about 30% in Kotak Mahindra Bank as of end-September, which is worth $9 billion based on current prices. That’s down from 33.6% in December 2016, a little before the Reserve Bank of India (RBI) directed the company to gradually reduce the founders’ stake to 15% by March 2020 in line with guidelines for bank licenses.
Subramanian, who is currently chief executive officer at Infina Finance Pvt., a $470 million long-short fund that has Kotak and his bank as sole investors, is working with members of Kotak’s family to put in place a team to manage the office. Kotak hadn’t set up a family office so far as most of his wealth was locked in the bank’s equity until March 2017.
Investing in debt would bring the family office into direct competition with the bank, while purchases of bitcoin may prove to be risky, Subramanian said.
“While the concept of crypto currency is alluring, as its value cannot be influenced by any government, the family office will not look at investing in it,” he said. Subramanian also flagged possible regulatory clamp downs and the addition of new global crypto currencies as possible risks to value. bLOOMBERG
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