Brookfield, SMBC to back $300m Indian infra fund

The Canadian asset manager and the Japanese banking giant will provide cornerstone capital for an unlisted infrastructure fund being raised by Kotak Mahindra Group, an Indian financial services firm.

Canada’s Brookfield Asset Management and Japanese banking giant Sumitomo Mitsui Banking Corporation (SMBC) have agreed to back an Indian Infrastructure fund targeting $300 million, the fund’s manager, Kotak Mahindra Group, said in a statement to the Bombay Stock Exchange.

“We are delighted that we have marquee institutions like SMBC and Brookfield investing along with us in the infrastructure fund,” C Jayram, executive director of Kotak Mahindra Bank, said in the statement.

Kotak, SMBC and Brookfield together will contribute up to 22.5 percent of the unlisted fund’s capital, Kotak said. The fund will target $300 million “to start with”, though “in the medium to long-term, our aim is to build a substantial presence in this space”, Jayram said.

Kotak said it will target both domestic and international investors for the fund and has set up two separate vehicles, one for domestic and the other for international investors to participate in the fund. Suman Saha, former director and co-head of the equity product group at Kotak Investment Banking, will head the fund’s investment team.

The fund will target power generation, transmission, roads, ports, airports and other infrastructure projects and holding companies across India. Saha called infrastructure “one of the country’s most promising investment stories”.

For Kotak, the launch of the fund represents a second attempt in recent months to create a fund dedicated to the Indian infrastructure sector. In January, the firm said it would seek to raise £100 million (€120 million; $157 million) for a listed Indian infrastructure fund on the London Stock Exchange. However, Kotak had to delay the planned public offering of the fund because it could not meet a requirement that at least a quarter of the fund’s shares be held in public hands.

Kotak is a Mumbai-based financial services firm with more than $11 billion in assets under management. Its interests include commercial and investment banking, insurance, and private equity, among other interests.