Kotak Mutual Fund Sets Sights on Rs 2,000 Crore Private Credit AIF

Kotak Mutual Fund aims to raise up to Rs 2,000 crore through its first-ever private credit alternate investment fund. A significant portion of this will be their own contribution. The expected returns are 3-4% higher than regular debt funds, targeting an IRR of 15-16%.

Kotak Mutual Fund is planning to raise up to Rs 2,000 crore with its first private credit alternate investment fund, a top official announced on Wednesday.

The asset management arm will launch the AIF in the upcoming quarter, contributing a fifth of the fund size itself, according to Deepak Agrawal, Chief Investment Officer-Debt of Kotak Mahindra Asset Management Company.

This move comes amid increasing interest in the private credit sector by asset managers. Competing firms like Aditya Birla Sun Life MF and Nippon MF have also introduced similar products. Agrawal noted that the expected internal rate of return from this offering will be 3-4 percentage points higher than standard debt mutual fund returns, with the industry targeting an IRR of 15-16%.

(With inputs from agencies.)