Editorial Team

Kotak Investment Advisors Limited (KIAL) today announced the launch of Kotak  India Alternate Allocation Fund, a Fund of Funds (FoF) to invest in other Private Equity (PE), Venture  Capital (VC) funds coupled with direct investments into companies.  

The fund targets to raise Rs 1,500 crore, including a greenshoe option of Rs 750 crore. The fund’s objective  is to diversify across PE/VC funds in multiple sectors, including consumer, technology, healthcare,  financials, etc, as well as across multiple stages, from early stage to growth stage and late stage across  different vintages. ‘Vintage’ refers to the first year the fund starts investing in companies. The fund also  intends to invest some portion into co-investment opportunities available from such investee funds. 

Nidhi Chawla, Fund Manager, Kotak India Alternate Allocation Fund said, “Investors require an optimal  alternate equity portfolio through diversification, right fund manager access and professional selection.  Lack of knowledge and information availability in this asset class makes it difficult to take an informed  choice. Diversification of risk across managers is tough due to high minimum investment requirements.  Through Kotak’s Fund of Funds we intend to provide investors access multiple funds as well as leverage  our institutional diligence with peer benchmarking data available, coupled with institutional monitoring  of long tenure funds.”  

“The performance difference between best and worst fund managers in PE/VC funds can be as high as 15- 20% IRR, so manager selection is critical,” adds Chawla. 

Srini Sriniwasan, Managing Director, Kotak Investment Advisors Limited said, “Indian alternate ecosystem  has become vibrant with PE/VC fund managers delivering consistent returns and outperformance over  public benchmarks. But many of the marquee fund managers have been inaccessible to domestic  investors as they raised only offshore capital or had high minimum ticket investment requirements. With  Kotak’s Fund of Funds, we intend to enable access to such funds and increase domestic overall  participation in the Indian alternates industry”. 

Kotak India Alternate Allocation Fund is set up as an Alternative Investment Fund under SEBI regulations,  managed by Kotak Investment Advisors Limited, the alternate asset management arm of the Kotak  Mahindra Group.  

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