New Delhi, Feb. 12 -- Kotak Alternative Asset Managers Ltd (Kotak Alts), the alternative asset management arm of the Kotak Group, has announced the first close of its private credit vehicle, the Kotak Yield & Growth Fund, at Rs 3,900 crore ($430 million). The Category-II alternative investment fund (AIF) is targeting a final close of Rs 5,000 crore.
Launched in September last year, the Kotak Yield & Growth Fund is a hybrid vehicle combining private credit yields with equity-linked returns..
This marks the largest first close to date for an Indian private credit fund. The vehicle is backed by several domestic family offices, ultra high-net-worth individuals (UHNIs), and leading Indian insurance companies, the firm said in a release, without disclosing the names of the limited partners (LPs).
Kotak Alts said the fund is "anchored in a differentiated investment strategy" aimed at delivering risk-adjusted returns "through a blend of stable yield-generation assets and selective growth opportunities."
The fund will be sector-agnostic and will look to back cashflow-positive assets, and mid- to large-sized enterprises "with strong governance practices," the firm said.
The development comes even as Kotak Alts, which operates multi-asset funds across special situations, private equity, real estate, infrastructure and private credit, has begun the process of raising its third special situations fund. The firm had raised $1 billion for its first special situations fund and $1.5 billion for its second. It is now looking to raise close to $2 billion for its third vehicle, VCCircle reported last month.
Founded in 2005, Kotak Alts has raised, managed and advised over $22 billion across asset classes. The firm had an active 2025, sealing several transactions through different funds. It invested Rs 1,050 crore in Tirupati Medicare in March and Rs 1,200 crore in Ace Designers a month later.
Kotak Alts raised its first special situations fund, Kotak Special Situations Fund I (KSSF I), in 2019. The second outing, KSSF II, recorded its first close at $1.25 billion in 2023 and reached a final close of $1.5 billion.
KSSF I invested in companies such as Jindal Stainless, Biocon Biologics, Omniactive Health, TVS Supply Chain, and AGS Transact Technologies.
KSSF II was backed by Singapore's GIC, the Abu Dhabi Investment Authority and PremjiInvest, and has backed at least six companies, including Viney Corp, RattanIndia Power, Neuberg Diagnostics, and Cropnosys.
Published by HT Digital Content Services with permission from VC Circle.