Kotak Realty Fund exits investments worth $356 mn from its managed account

Kotak Realty Fund, part of Kotak Investment Advisors, has exited $356 million worth of investments from its managed account of Abu Dhabi Investment Authority (ADIA) and another sovereign fund from West Asia.

In a managed account, an individual investor gives money to a fund manager to invest and manage his fund. In comparison, in a private equity fund, the manager takes care of funds of many investors.

The capital was invested across different properties in Chennai, Mumbai, the National Capital Region, and Bengaluru. The latest fund has generated a gross internal rate of return (IRR) of 19 per cent across investments, said a release from Kotak Realty Fund.

Early this year, Kotak Realty Fund made an exit worth Rs 8.38 billion from Lodha Developers’ township project Palava City on the outskirts of Mumbai. The fund manager had an IRR of 18.75 per cent through this exit in less than 2.5 years. Raised in 2013-14, the $400 million offshore fund included a commitment of around $200 million from ADIA.

Kotak Realty Fund had invested Rs 5.40 billion in this project in 2015 through its $400 million offshore fund.

Vikas Chimakurthy, chief executive officer, Kotak Realty Fund, said, “Despite tight liquidity and tepid sales, we have been able to manage these results due to our focus and attention to detail.”

Set up in 2005, Kotak Realty Fund has committed over $1.49 billion in different projects.

(Disclosure: Entities controlled by the Kotak family have a majority holding in Business Standard)