Kotak Alternate Assets Managers Ltd, the private equity arm of the Kotak Mahindra Group, is gearing up to raise its third Kotak Strategic Solutions Fund (KSSF III). Targeting a corpus of $2 billion, the new fund will extend loans and structured credit to Indian companies, reinforcing Kotak’s growing dominance in private credit.
Ambitious Plans for Growth-Stage Lending
According to Easwar Karra, deputy managing director of Kotak Alternate Asset Managers, KSSF III plans to deploy between ₹800–1,000 crore across 12–15 growth-stage companies. The fund is designed to provide bespoke credit solutions tailored to Indian businesses, an area where Kotak has built strong expertise.
Unlike earlier funds, KSSF III will not only court global investors such as sovereign wealth funds and pension funds but also domestic institutions. Its predecessors—KSSF I ($1 billion) and KSSF II ($1.5 billion)—were largely raised from overseas investors.
Karra emphasized Kotak’s edge in underwriting, stating that its domestic credit assessment capabilities and consistently low non-performing loan levels set it apart from banks and peers.
Competitive Landscape in Private Credit
The announcement comes at a time when multiple asset managers are intensifying their presence in India’s private credit market. Domestic players such as Avendus Capital and Neo Wealth Management have introduced new credit funds, while global giants including Blackstone, Bain, and Carlyle are actively seeking structured credit opportunities in India.
Kotak’s earlier KSSF investments highlight its strategy of mixing growth financing with turnaround bets. The first fund backed companies like Biocon, DCW, and Sanghi Industries, while also investing in stressed assets such as HKR Roadways. KSSF II deployed capital into sectors such as pharmaceuticals, diagnostics, and medical devices, with investments in Matrix Pharma, Neuberg Diagnostics, and Biorad Medisys.
Expansion Beyond KSSF III
KSSF III is part of Kotak’s broader private credit expansion. Recently, the firm launched the Kotak Yield & Growth Fund (KYGF), a ₹4,000 crore strategy focused on credit-led yields with selective growth participation in infrastructure assets. The strategy, primarily backed by domestic institutions and high-net-worth individuals, reflects Kotak’s intent to diversify credit offerings.
In addition, Kotak is working on closing its life sciences fund within the next 3–4 months. With a target of ₹800–1,000 crore, this fund will focus on 15–20 transactions in the ₹25–40 crore range, particularly in companies requiring scale-up capital.
Kotak’s Growing Footprint in Alternatives
Kotak Alternate Asset Managers currently oversees nearly $10 billion in assets, with more than 120 investments across private credit, pre-IPO opportunities, listed equities, and life sciences. With credit as its cornerstone, the firm continues to evolve its playbook by blending structured solutions with sector-focused funds.
By launching KSSF III, Kotak not only reaffirms its commitment to India’s credit market but also signals confidence in the increasing appetite of domestic institutions to participate alongside global investors. As competition in India’s private credit space heats up, Kotak’s strong underwriting record and diversified credit strategies may prove to be its biggest differentiator.
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