Kotak Mahindra Group Raising $300M PE Fund

India’s Kotak Mahindra Group aims to raise $300 million in local and international private equity funds for investments across infrastructure programs, Reuters reported. Japan’s Sumitomo Mitsui Banking Corp and Canada’s Brookfield Asset Management have signed on as investors in the fund, contributing up to 22.5% of the capital. India has said it needs to double infrastructure spending to $1 trillion over the next five years, Reuters said.

(Reuters) – India’s Kotak Mahindra Group is seeking to raise private-equity funds of about $300 million from local and international investors to invest in infrastructure projects in the world’s second-fastest growing major economy.

Japan’s Sumitomo Mitsui Banking Corp and Canada’s Brookfield Asset Management (BAMa.TO) will participate in the fund as cornerstone investors, with the three entities contributing up to 22.5 percent of the funds’ capital, Kotak Mahindra said in a statement.

India, Asia’s third-largest economy, has said it needs to double infrastructure spending to $1 trillion in the five-year period starting 2012, with private-sector investment contributing a significant share.

It spends about 6 percent of its GDP on infrastructure, less than several countries in Asia, and nearly half of the 11 percent invested by larger rival China.

Kotak Mahindra said its funds will invest mainly in power generation and transmission, roads, ports, airports and other infrastructure projects including water treatment and supply, waste management, gas transmission, and also in infrastructure holding companies.

Kotak Mahindra Group said Kotak Investment Advisors Ltd will manage a domestic fund, while another group firm Kotak Mahindra (UK) Ltd will manage an offshore fund.

Private-equity investment in India nearly doubled last year to about $8 billion, according to Venture Intelligence, a research firm.

In December, British private-equity firm 3i Group Plc (III.L) said it planned to launch a $1.5 billion infrastructure fund for India in 2011, as it looks to boost investments in sectors such as power, ports and roads.

(Reporting by Neha Singh and Devidutta Tripathy; Editing by Aradhana Aravindan)