The fund, launched by Kotak’s UK subsidiary and managed by Nitin Jain, will invest in companies directly or indirectly involved in the infrastructure sectors in India with the aim of providing long-term capital appreciation.
The close-ended fund will be domiciled in Guernsey and listed on the London Stock Exchange. The company is aiming to raise up to £100m for the fund via an institutional placing and a subscription offer for private investors.
Though benchmarked against the FTSE IDFC India Infrastructure 30 Index, Kotak Mahindra expects the portfolio to “diverge substantially” from benchmark constituents. The portfolio will contain between 40 and 60 holdings, and will have no hedging of currency exposure at launch.
“The listed Indian infrastructure universe is broad, liquid and deep with over 360 listed entities having a market capitalisation of over $50 million. With the increased government spending, the sector is poised for a valuation re-rating in the coming years, and may offer superior long-term risk adjusted returns,” said Jain.
With the pace of development of Chinese infrastructure having long been a sign of that country’s remarkable economic prosperity, the three other Brics are now playing catch up with the launch of huge infrastructure investment projects backed by the public and private sectors alike.
In Brazil, both Martin Currie and BNY Mellon are looking to take advantage of an infrastructure boom that sees 150 separate major infrastructure projects scheduled between now and 2014.
