UK government-backed fund of funds CDC Group has committed $40 million to the Kotak India Private Equity Fund, which will target investments in small to medium sized enterprises (SMEs) in the subcontinent.
The second fund to be raised by Kotak Mahindra Bank's private equity division, the vehicle is targeting $200 million, with a hard cap of $250 million. It will invest between $15 million and $40 million for minority stakes in SMEs focused on domestic consumption and consumer spending, infrastructure and infrastructure-led services.
“While India's short-term growth is expected to slow, new private equity investment will further develop the emerging private sector and foster the next generation of successful enterprises in India,” Anubha Shrivastava, CDC's managing director for Asia, said in a statement.
Kotak's Indian fund will invest alongside the Kotak India Growth Fund II, which closed in March 2008 after raising $440 million from domestic investors.
The commitment to the Kotak fund brings the total of CDC's investments in India to $200 million. It has previously committed capital to Actis, Barings, ICICI and IDFC PE.
In January, CDC announced commitments totalling $40 million to two other SME focused funds.
The fund of funds committed $30 million to Kendall Court Mezzanine (Asia) Bristol Fund, which will focus on mezzanine, growth capital and buyouts in SMEs in Southeast Asia, and $10 million to Centras Private Equity Fund, which will invest in Central Asia, mainly in the Republic of Kazakhstan.