Wednesday, January 10, 2007

Kotak lines up a second $350 mn real estate fund

The real estate investment arm of Kotak Mahindra Limited is raising its second fund. Kotak Realty’s Kotak India Real Estate Fund II is planning a corpus of around $350 mn, and has got commitments from international investors, financial institutions, multilateral agencies and high-net worth investors in the United States, the Middle East and Europe for investing in Indian real estate. The fund is expected to be closed in the next 5-6 weeks.

In May 2005, Kotak Mahindra Investments started Kotak Realty Fund with the setting up of the Kotak India Real Estate Fund I — a $100-min fund for investing in real estate. The fund will be probably closed by March 2007.

Kotak’s new fund would seek equity investments in development projects and enterprise level investments in real estate operating companies. These would include hotels, healthcare, retailing, education and property management. The proposed fund will also focus on the northern region.

Kotak Realty’s first fund, a closed-ended fund of seven years, is said to have deployed nearly 65-70% of its corpus. While it invested through the pre-IPO placement in Bangalore-based Sobha Developers, the fund has also invested in the Delhi-based hotel chain Lemon Tree Hotels and Red Fox Hotels. Both these hotel chains have also been funded by private equity major Warburg Pincus. The fund, which will be organized as a scheme of Kotak Mahindra Realty Fund, will have Kotak Mahindra Investments Ltd as the investment manager.

Read more about the fund in The Economic Times article.

1 comment:

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