Kotak Investment Advisors Ltd (KIAL) on Monday closed its latest real estate fund after raising $590 million. Abu Dhabi Investment Authority (ADIA), through its subsidiary, has invested in the fund. This is the 12th real estate-focused funding garnered by the investment banking firm so far. The transaction took place in Gift City in Gujarat.
With this closure, KIAL has raised, managed or advised more than $2.8 billion under its real estate fund series, of which $1 billion alone was raised in the last year. The company, a part of Kotak Mahindra bank, has overall $4.6 billion across different asset classes including private equity funds, real estate funds, infrastructure funds, special situations fund, and investment advisory. The latest fundraising comes after a gap of three months as the company had closed its 11th fund after raising $390 million in February. Kotak Investment Advisors had launched its maiden fund in 2005.
The corpus of the fund will be deployed for investments in office assets in India, the company said in a press release. The company is planning to further raise similar funding for various alternative investment opportunities in India.
“This new platform will focus on opportunities associated with long term demand for Indian office space, which is being driven by global organisations seeking to capitalise on the country’s skilled workforce,” Mohamed AlQubaisi, executive director of the real estate department at ADIA said.
ADIA’s latest investment in Kotak Investment Advisors’ fund comes after the Abu Dhabi-based fund agreed to make a couple of major investments in India’s real estate sector. ADIA signed one agreement in June to invest Rs 2,200 crore for 20% stake in IIFL Home Finance and another agreement to acquire 10% stake in HDFC Capital for Rs 184 crore.
“Strong demand for offshoring, return to office increasing, growth of the services industry and Indian economy has seen substantial scope for creating a portfolio of quality office assets. With multiple avenues for exit of such portfolios and increasing liquidity of completed assets, we intend to curate this portfolio to cater to increasing appetite for stabilised assets,” Vikas Chimakurthy, CEO of Kotak Realty Fund said.