Kotak India Renaissance Fund-I
Fund Snapshot
| Investment Manager | Kotak Mahindra Asset Management Company Limited |
| Fund Type | Open-Ended Category III Alternative Investment Fund |
| Initial Contribution | Minimum 1 Crore |
| Fund Strategy | Long-Only Fund |
| Subscription Period | Fortnightly* |
| Redemption Period | Quarterly Exit with 30 Business Days Notice* |
| Exit Load | 2% within 12 months; 1% between 12 months to 18 months from the date of subscription |
| Benchmark | Nifty Midcap 100 TRI |
| NAV Frequency | Once a Month |
| Tax Treatment | For Tax Consideration, please refer to relevant section XI in the PPM * |
The Asset Management Strength of Kotak
- Over 20 years of fund management experience may be found at Kotak Mahindra Asset Management Company (KMAMC). In December 1998, it began operating. As of March 31, 2022, KMAMC ranked as the fifth-largest fund firm in India in terms of average quarterly AUM.
- One of the first few private companies in India to be certified to administer pension funds
- Providing solutions to clients in other countries for more than 15 years
- The Monetary Authority of Singapore regulates Kotak Mahindra Asset Management (Singapore) Pte. Ltd., which is also a Registered Investment Advisor with the SEC in the United States.
Kotak’s Edge
With a focus on India and a worldwide presence, Team Kotak is dedicated to offering investors worldwide investment management services of the highest caliber.
- ‘India-Only’ manager with strong ties to one of the biggest private banks, extensive network
- Worldwide presence and a wealth of expertise in managing capital across asset classes.
- 20 years of expertise managing assets for customers that are based overseas
- Large teams present on the ground to ensure comprehensive and wide-ranging research coverage
- A cautious, institutional investment strategy combined with effective risk management
- Solid knowledge of Indian corporate governance frameworks
- Successful asset management firm with over $50.46 in total assets under management
- Offshore fund structures that are knowledgeable about global legislation
What Kotak Avoid
Practically speaking, it is harder to know what is good than what is terrible. Therefore, Kotak first concentrate on eliminating “poor” along the following 10 categories before deciding between the “cannot be rejected on any factor.” Avoid corporations with inferior traits and poorly controlled businesses.
They are seeking businesses with the following qualities:
- Good theme
- Large market opportunity
- Favorable industry dynamics
- Low potential for disruption
- Sustainable competitive advantage
- Strong management/background/strategy/growth
- Strong corporate governance & Execution
- Superior return on incremental Capital
- Medium-term positive triggers
- Reasonable Valuations
Key Themes
- Big Getting Bigger, Strong Getting Stronger
- Revival of Ind Manufacturing & Private
- Real Estate & Home Improvement
- Exports Opportunity
- Digitization
- Financialization
Investment Framework
- Business: Size, Scalability, Competition, Sustainability
- Management: Vision/growth orientation, Corporate Governance, Execution track record, Capital Allocation
- Valuation: Growth at a reasonable price, ROE/ROCE/Free cash flow
Portfolio Construct
- Listed & traded in India: ~4866 stocks
- Market Cap of > Rs 1500 crs: 861 stocks
- Under research coverage: 437 stocks
- Businesses will profit from increased consumer discretionary spending, massive infrastructure investments, and a recovery in GDP. It will benefit businesses with minimal fixed costs, low leverage, and robust balance sheets.
- ~ 25-40 Stock Ideas based on BMV
Dedicated In-house Research Team
- An analyst runs exemplary portfolios. The sector model portfolio.
- Calls for capitalization Internal algorithmic guidance for making allocation recommendations for large-and mid-cap stocks
- Sectors
- Interaction with industrial participants in the sector
- Discussions with sector experts at brokerage houses on a regular basis
- There are typically 8 to 12 management meetings per analyst or fund manager per month.
Stocks:
- Investee company updates every three months
- Businesses with direct coverage receive at least two visits per year
- At least once a year, meet with the senior management.
Reuters Starmine
- All sell-side research is available.
- Choose the most competent sell-side analyst at the stock level
Strategy Synopsis
Objective
Although the Fund will diversify across market caps, it will lean toward mid- and small-cap investments.
Stock Holdings
25 to 40 stocks, chosen from the bottom up
Risk Mitigation
Emphasis on free cash flows and management quality
Flexibility
Unconstrained w.r.t sector
Portfolio Focus – Investment Themes
- Big Getting Bigger, Strong Getting Stronge
- Revival of Industrial Manufacturing & Private sector
- Exports Opportunity
- Real Estate & Home Improvement
- Digitization
- Financialization
Key Sectors
- Consumer Goods: 23%
- Industrial Manufacturing: 17%
- Industrial Manufacturing: 14%
- Pharma: 10%
- Information Technology: 7%
- Chemicals: 5%
- Cement & Cement Products: 6%
- Consumer Services: 4%
- Automobile: 4%
- Metals: 3%
- Fertilisers & Pesticides: 2%
- Construction: 2%
- Cash: 3%
Investment Objective
The Fund’s investment goal is to increase Beneficiaries’ wealth through long-term capital growth through investments in Portfolio Vehicles I that are listed on recognized Indian stock exchanges or (ii) that are expected to be listed. Although the Fund will diversify across market caps, it will lean toward mid- and small-cap investments. The investments may be made in debt instruments, and equity preferred securities, or other products as may be allowed under AIF Regulations.
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Nilesh Shah
Nilesh Shah is the Managing Director of Kotak Mahindra Asset Management Company (Kotak AMC) with over 25 years of experience across equity, fixed income, and real estate investing. He also serves as a part-time member of the Economic Advisory Council to the Prime Minister (EAC-PM). A Gold Medallist Chartered Accountant and Merit-ranked Cost Accountant, he is widely recognised for his contributions to India's investment management industry.
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The Kotak India Renaissance Fund-I is an Open-Ended Category III Alternative Investment Fund (AIF) designed to generate long-term capital growth by investing in equity and equity-related instruments listed or expected to be listed on Indian exchanges. While the fund maintains the flexibility to diversify across the entire market spectrum, it maintains a strategic lean toward mid-cap and small-cap investments to capture high-growth opportunities. The portfolio is benchmarked against the Nifty Midcap 100 TRI, reflecting its intent to outperform through a bottom-up selection of 25 to 40 high-conviction stock ideas.
The fund benefits from the institutional strength of Kotak Mahindra Asset Management Company (KMAMC), which brings over 20 years of experience and a deep understanding of Indian corporate governance frameworks. A key differentiator is their "India-Only" expertise combined with a global research presence, supported by a large on-the-ground team that conducts extensive primary research, including 8 to 12 management meetings per analyst monthly. This rigorous approach ensures comprehensive coverage and a cautious investment strategy that balances aggressive growth seeking with robust risk management and internal algorithmic guidance for capitalization calls.
The investment team utilizes a structured "BMV" (Business, Management, Valuation) framework to evaluate potential holdings and mitigate risks. Under "Business," they analyze size, scalability, and sustainability; "Management" focuses on vision, execution track record, and capital allocation; and "Valuation" ensures that growth is acquired at a reasonable price with a focus on ROE, ROCE, and free cash flows. This process involves a "negative screening" phase where the team first eliminates companies with poor governance or inferior traits across 10 categories before selecting businesses that demonstrate a sustainable competitive advantage and medium-term positive triggers.
The fund identifies six primary themes positioned to benefit from a recovery in India's GDP and increased infrastructure investments: "Big Getting Bigger" (market leaders gaining share), the revival of Indian manufacturing and the private sector, the real estate and home improvement cycle, the expanding export opportunity, digitization, and the financialization of Indian savings. Sectorally, the fund shows a significant preference for Consumer Goods and Industrial Manufacturing, which together account for approximately 40% of the portfolio, targeting businesses with low leverage and robust balance sheets that can profit from discretionary spending.
As an open-ended Category III AIF, the fund allows for fortnightly subscriptions, but redemptions are processed on a quarterly basis, requiring a 30-business-day notice period. This structure is intended to align investor liquidity with the fund’s mid-to-small cap focus, which often requires longer holding periods to realize value. To discourage short-term churn and protect long-term beneficiaries, an exit load of 2% is applicable if redeemed within 12 months, which reduces to 1% for redemptions made between 12 and 18 months from the date of subscription, with no exit load thereafter.
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