Kotak Investment Advisors Limited (KIAL) has entered into a partnership with Allianz Investment Management SE, the investment management arm of insurer Allianz Group, to invest in the Indian private credit market.
In February 2021, Allianz made its maiden credit investment of $150 million in KIAL’s 11th Real Estate Debt Fund that achieved a closure of $380 million. KIAL’s Real Estate Fund primarily focuses on financing early- and late-stage real estate projects across the country.
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Allianz’ total private credit investments in India so far is about $650 million and the firm is looking to increase it to $1 billion in 2021.
KIAL, a wholly-owned subsidiary of Kotak Mahindra Bank Limited, focuses on the group’s alternate assets businesses.
“Kotak Investment Advisors’ partnership with Allianz is indeed momentous not only for us, but also for the Indian alternate asset management industry. As a growth economy, the Indian economy’s capital needs are spread across the spectrum of equity and credit. Our partnership blends on the strength of two partners. Allianz brings with it the much-wanted large package of dry powder and KIAL has the expertise in identifying the right opportunities as and when they arise in India,” Uday Kotak, Managing Director and Chief Executive Officer at Kotak Mahindra Bank, said.
“India is one of the largest private debt markets in Asia and fits well into our portfolio as a high-quality diversifier. The real estate players in India are struggling to get access to traditional lending. We believe in the long-term potential of the sector in India that presents a favourable risk-reward ratio for private credit. We are excited to partner with Kotak, one of India’s most trusted investment managers, to provide the much-needed debt capital to accelerate completion of early- and late-stage real estate projects in India,” Sebastian Schroff, Global Head of Private Debt at Allianz Investment Management, said.