Kotak Investment Advisors Ltd (KIAL), the alternative assets arm of Kotak Mahindra Group, which is backed by one of Asia’s richest bankers Uday Kotak, on Tuesday said it has secured $500 million from a subsidiary of Abu Dhabi Investment Authority (ADIA) for its new $1 billion real estate fund.
With the new fund, Kotak aims to primarily invest in residential opportunities in India. The launch of the fund comes less than five months after Kotak closed its 12th real estate fund focused on office property after raising $590 million from ADIA.
“This agreement extends our existing and longstanding relationship with Kotak. The new platform is primarily targeted at the significant demand for housing in India, which is driven by sustained economic growth and a shortage of urban housing clusters,” Mohamed AlQubaisi, executive director of the Real Estate Department at ADIA said in a statement.
KIAL, which was set up in early 2005 has raised/managed/advised in aggregate over $6.8 billion across different asset classes including real estate, private equity, infrastructure, special situations fund, and investment advisory.
Vikas Chimakurthy, CEO, Kotak Realty Fund said, “This is an opportunistic fund that can invest across various real estate asset classes and capital stack i.e. both debt and equity. The fund will primarily target investments in residential real estate. With the first close of this fund, KIAL has raised around $1.5 billion in real estate across multiple strategies in around one and a half years.”
Last month, Bloomberg reported that along with ADIA, Allianz SE could also invest about $220 million in KIAL’s 13th real estate fund. KIAL did not respond to a request for comment by DealStreetAsia.
Real estate has been one of the worst-hit sectors by the pandemic. According to ANAROCK Capital’s FY22 year-end edition of its FLUX report, real estate private equity investments registered a year-on-year decline of 32% in FY22.
However, the sector has recently seen a spate of investments particularly in the commercial development space. Recently, Tata Realty and Infrastructure, and Canada Pension Plan Investment Board (CPPIB), entered into a joint venture (JV) to develop and own commercial office space across India, while Rustomjee Group set up a $50-75 million development fund platform.