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Kotak Alternate Assets marks first close of $800 mn data centre fund

The Kotak Data Centre Fund will invest in building data centre capacity, in a bid to support data-backed digital economy, enterprise cloud, 5G and IoT

In December, KIAL also marked the final close of its Kotak Infrastructure Investment Fund (KIIF), a category-II alternate investment fund (AIF) with a corpus  ₹6,000 crore. (Reuters)Premium
In December, KIAL also marked the final close of its Kotak Infrastructure Investment Fund (KIIF), a category-II alternate investment fund (AIF) with a corpus 6,000 crore. (Reuters)

Kotak Alternate Assets, managed by Kotak Investment Advisors Ltd, on Tuesday said it has marked the first close of its Kotak Data Centre Fund at $590 million, raising about 74% of the targeted corpus of $800 million. 

The Kotak Data Centre Fund will invest in building data centre capacity, in a bid to support data-backed digital economy, enterprise cloud, 5G and IoT (internet of things). The fund is domiciled in Gujarat’s GIFT City. 

 “Being a high capex industry requiring capacity build up, we believe that there is an equity investment opportunity to back partners in creating capacities. We will provide strategic risk capital and value-added support to our partners," said Rahul Shah, executive director at Kotak Investment Advisors Ltd. 

The data centre fund, announced in November last year, counts Subhamkar Das as its chief operations officer. 

 “India is on the cusp of a data revolution. Data Centers are therefore at the core of country’s Digital India ambition," Srini Sriniwasan, managing director of Kotak Investment Advisors Limited said. The data centre-focused fund comes in the backdrop of a growing industry, that forms the backbone of India’s digital economy mission, which, as per government forecast, is likely to grow to $1 trillion in value, by 2025. 

A report by real estate advisory firm CBRE noted that data centre investments in India may surpass the $20 billion mark by 2025, as the last five years have seen investment announcements worth $14 billion in this space. 

According to a report by Statista, the revenue earned by India’s data centre market is likely to touch about $7.83 billion by 2023, while growing at an annualized rate of about 4.3% through 2023-2027, taking the market volume to about $9.27 billion by 2027. 

Set up in 2005, Kotak Investment Advisors is the alternate assets management and investment advisory arm of the Kotak Mahindra Group. It has, so far, raised, managed, and advised, in aggregate, over $7.5 billion across asset classes including real estate, private equity, infrastructure, special situations fund, and investment advisory. 

VCCircle had, in June last year, reported on its upcoming investment plans. It stated that the investment advisory firm plans to foray into venture capital, venture debt and buyouts space. 

In December, KIAL also marked the final close of its Kotak Infrastructure Investment Fund (KIIF), a category-II alternate investment fund (AIF) with a corpus 6,000 crore. It had received commitments of 5,328 crore from anchor investors including Canada Pension Plan Investment Board and the Asian Infrastructure Investment Bank (AIIB) for the fund.   

The alternate asset company's 13th real estate fund, sized at $1 billion, also received commitments from the Abu Dhabi Investment Authority (ADIA)

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Updated: 14 Feb 2023, 08:28 PM IST
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