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NEW DELHI: Kotak Alternate Assets, managed by Kotak Investment Advisors will launch a 1,000 crore private credit fund, a category II alternative investment fund (AIF). Kotak Private Credit Fund will be headed by Niraj Karia, formerly with KKR. The fund will have a green-shoe option for raising another 1,000 crore.

As per a company statement, the fund will have a diversified investment universe and be sector-agnostic. It will focus on the performing credit space, providing debt to growth-oriented companies with established business models in the mid-market space to fetch mid-to-high-teen returns. 

Srini Sriniwasan, Managing Director, Kotak Investment Advisors, said, “The effort to raise a Private Credit Fund comes at an opportune time, coinciding with the evolving private credit ecosystem and will help increase our footprint in the credit investment space by making secured investments in mid-sized businesses while generating superior returns."

There are three categories of AIFs – I, II and III. Category II AIFs are those that do not fall under categories I and III and do not undertake leverage other than to meet their day-to-day operational requirements as per SEBI regulations. Real estate funds and private equity funds fall under this category. According to SEBI data, category II AIFs had raised funds totalling 2.23 trillion and had made investments worth 1.99 trillion as of 31 March 2022. This accounted for 70-71% of the funds raised and investments made by all AIFs – category I, II and III – put together.

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