Kotak Investment, Allianz tie up for investing in Indian pvt credit market

In February 2021, Allianz made its maiden credit investment of $150 mn in KIAL's eleventh Real Estate Debt Fund that achieved a closure of $380 mn

Kotak Investment Advisors (KIAL) and Allianz Investment Management SE (Allianz) – the investment management arm of Germany's Allianz Group - on Monday announced that they are partnering to invest in Indian private credit market.

In February 2021, Allianz made its maiden credit investment of $150 million in KIAL’s eleventh Real Estate Debt Fund that achieved a closure of $380 million. KIAL’s Real Estate Fund primarily focuses on financing early- and late-stage real estate projects across geographies in India. Allianz’s total private credit investments in the country so far is worth about $650 million and it is looking to increase it to $1 billion in 2021, Kotak said.

Uday Kotak, Managing Director & CEO, Kotak Mahindra Bank said: “Kotak Investment Advisors’ partnership with Allianz is indeed momentous not only for us, but also for the Indian alternate asset management industry. As a growth economy, Indian economy’s capital needs are spread across the spectrum of equity and credit. Our partnership blends on the strength of two partners. Allianz brings with it the much wanted large package of dry powder and KIAL has the expertise in identifying the right opportunities as and when they arise in India.”

Ritu Arora, CEO & CIO Asia, Allianz Investment Management Asia said: “We are pleased to enter into this long-term partnership with the Kotak Group. The Kotak Group is deeply ingrained into the Indian credit markets and both groups are committed to strengthen this partnership going forward. As one of the largest private debt investors globally, one of our key drivers of success has been our focus on selecting best in class partners. We believe this partnership is a natural fit and will enable us to capitalize on the best private debt opportunities available in India. We continue to firmly believe in India’s long-term structural growth story and are keen to partner in its post-pandemic recovery and drive sustainable and inclusive growth.”

Sebastian Schroff, Global Head of Private Debt at Allianz Investment Management said: “India is one of the largest private debt markets in Asia and fits well into our portfolio as a high quality diversifier. The real estate players in India are struggling to get access to traditional lending. We believe in the long-term potential of the sector in India that presents a favorable risk-reward ratio for private credit. We are excited to partner with Kotak, one of India’s most trusted investment managers, to provide the much-needed debt capital to accelerate completion of early- and late-stage real estate projects in India."