Kotak Alts Secures $1 Billion Real Estate Fund with ADIA and NPS Korea

Kotak Alternate Asset Managers Ltd (Kotak Alts), the alternative assets arm of the Kotak Group, has achieved the final close of its 14th real estate fund at $1 billion. The fund is anchored by a $675 million commitment from a subsidiary of the Abu Dhabi Investment Authority (ADIA).

The fund has also secured a commitment from National Pension Service of Republic of Korea (NPS Korea), marking the pension fund's first investment in Indian alternative assets. ADIA's investment represents the sixth consecutive commitment from an ADIA subsidiary to its real estate platform.

The new fund focuses on providing financing support across residential, commercial, and other real estate asset classes across key cities in India. This investment highlights the growing confidence of global institutions in India's real estate market, despite current market volatility.

“ADIA’s sixth consecutive commitment to our platform is a testament to the trust earned over a decade of consistent delivery. NPS Korea’s maiden Indian alternatives commitment to our platform for an India dedicated strategy in these volatile times is an equally powerful validation,” said Srini Sriniwasan, managing director, Kotak Alts. “Together, these partnerships define the quality of the Kotak Alts franchise and the confidence that global institutions place in our ability to generate superior risk-adjusted returns.”

NPS Korea is Republic of Korea's national pension fund and one of the world's largest institutional investors, managing assets of over $1 trillion. This investment underscores the growing interest from global investors in India's real estate sector.

India's large fund managers are seeing increasing interest from new global investors from countries including Japan and South Korea. Last week, HDFC Capital Advisors Ltd announced that the Development Bank of Japan Inc. (DBJ) has made its first real estate investment in India, committing capital to HDFC Capital Development of Real Estate Affordable and Mid-Income Fund (H-DREAM Fund), which aims to raise $1 billion, including a green-shoe option.

“The demand for capital to support real estate in India is robust, while Kotak has delivered consistent returns and displayed underwriting discipline across market cycles,” Mohamed Al Qubaisi, executive director of the real estate department at ADIA, said in a statement. “This anchor commitment is testament to the strong relationship we have built over more than a decade.”

Kotak Alts was set up in early 2005 and has raised, advised on, and managed over $22 billion across asset classes, including private equity, real estate, infrastructure, special situations, private credit, and investment advisory.

Vikas Chimakurthy, chief executive, Kotak Alts (Real Estate Fund), said, “The 14th fund is built on the learnings of 13 prior vintages — across multiple real estate cycles, regulatory transitions, and liquidity environments. That depth of institutional memory is what gives global investors like ADIA and NPS Korea the confidence to commit.”

Kotak's new fundraise comes at a time when India's real estate sector is performing well in both the residential, commercial, and industrial segments. There is a continuous need for private equity capital to be filled up as the demand for capital remains high.

Shobhit Agarwal, chief executive at Anarock Capital, noted that the real estate fund-raising environment centers around big managers such as Kotak and HDFC. “They are raising foreign institutional capital from both existing limited partners as well as bringing new LPs on board. For mid-sized and smaller managers, it's mostly domestic capital. There are 20 domestic AIFs (alternative investment funds) that are each raising between ₹200-500 crore,” he said.