Kotak Real Estate Fund XII - IFSC II

Kotak Mutual Fund

Established in 1985 by Mr. Uday Kotak, it was thefirst Indian non-banking financial company to be given a banking license by the Reserve Bank of India in February 2003. The group caters to the financial needs of individuals and institutional investors across the globe. Kotak Mahindra Group (Group), founded in 1985, is one of India's leading financial services conglomerates. In February 2003, the Reserve Bank of India (RBI) granted Kotak Mahindra Finance Ltd. (KMFL), the Group's flagship company, a banking license, making it India's first non-banking finance company to convert into a bank - Kotak Mahindra Bank Ltd. The Group provides a broad range of financial services that cover all aspects of life. The Group offers a wide range of financial services to individuals and businesses, including commercial banking, stockbroking, mutual funds, insurance, and investment banking. The Group has a large distribution network that includes branches and franchisees throughout India, an International Business Unit at DIFC in Dubai, and international offices in London, New York, Dubai, Abu Dhabi, Mauritius, and Singapore. Kotak Mahindra Bank is the flagship company of the Kotak Mahindra Group, a leading financial services conglomerate headquartered in Mumbai, India. About Kotak Mahindra Bank - GIFT City Branch Kotak Mahindra Bank established its International Financial Services Center Banking Unit [IBU] in Gujarat International Finance Tec (GIFT) City on May 3, 2016. GIFT is India's first global financial and IT services hub, designed in the style of global financial centers and overseen by the International Financial Services Centres Authority. The branch serves a global customer base and offers a diverse range of products and services, including deposits, loans and advances, and treasury services.

Fund Snapshot

Fund Attribute	Details
Fund Name	Kotak Real Estate Fund XII – IFSC II
Fund Manager	Kotak Alternate Asset Managers Limited (KAAML)
Regulatory Authority	International Financial Services Centres Authority (IFSCA)
AIF Category	Category-II AIF (Alternative Investment Fund)
Registration Number	IFSC/AIF2/2024-25/0179
Date of Registration	October 16, 2024
Base Currency	US Dollar (USD)
Primary Target Investors	Sovereign Wealth Funds, Global Pension Funds, and Large Offshore Institutional Pools

Fund Overview

Kotak Real Estate Fund XII – IFSC II is a closed-ended, opportunistic private equity real estate fund. It is part of Kotak’s prominent “Fund XII” umbrella, which successfully aggregated hundreds of millions of dollars in global capital commitments.

Operating under the modern IFSCA regulatory framework in GIFT City, Gujarat, the fund allows global institutional titans to bypass the historical currency friction, structural onshore tax blockages, and administrative overhead typical of domestic Indian routes. Capital is pooled in foreign currency (primarily USD) and institutionalized directly into massive, late-stage, or cash-flow-yielding real estate operations in India’s leading tier-1 micro-markets.

Investment Philosophy

Kotak Alternate Asset Managers governs Fund XII under a multi-decade institutional real estate framework built to withstand fluctuating market cycles:

Focus on Macro Structural Tailwinds: The philosophy targets institutional-grade assets that directly benefit from India’s broader macroeconomic expansion. This includes high-demand commercial IT hubs, premium Grade-A residential developments, and strategic logistics/industrial warehousing parks.
Capital Protection via Structured Deals: Fund XII prioritizes customized financing solutions. Instead of taking speculative early-stage land-acquisition risks, the fund focuses on providing senior or mezzanine construction finance, late-stage growth equity, or inventory funding to tier-1 developers with proven execution velocity.
Institutional Counterparty Standard: The team only aligns with developers who meet stringent corporate governance, high balance-sheet transparency, and flawless execution timelines.
Preset Multi-Channel Exits: Exits are integrated directly into the underwriting framework through robust mechanisms such as pre-defined asset refinancing, cash-flow trapping, developer buybacks, or secondary portfolio liquidation via listed Indian Real Estate Investment Trusts (REITs).

Fund Manager

Uday S. Kotak

Uday S. Kotak is the Chairman and Non-Executive Director of the Company, plus he founded and directs Kotak Mahindra Bank Limited. He used to be the Bank's Managing Director and CEO until September 2023. Now, he's in a non-executive position, still helping steer the bank's future. He has almost 40 years of experience and was a key player in growing the Kotak Mahindra Group into one of India's top financial service groups. They do all sorts of things like banking, asset management, insurance, and capital markets. People think of Mr. Kotak as someone who really helped shape India's financial scene. He's been in charge of the Indo-UK Financial Partnership and been on global advisory boards. He's also headed big governance projects and won a bunch of awards for his career and business smarts. He got his bachelor's degree in commerce and an MMS from JBIMS, Mumbai.

Frequently Asked Questions

What is the specific purpose of the "IFSC II" parallel structure? +

Large private equity real estate funds often establish parallel or distinct feeder sub-funds (like IFSC I and IFSC II) to accommodate diverse global institutional investors. This structure allows the fund manager to compartmentalize different sovereign wealth funds, pensions, or regional tax jurisdictions while seamlessly co-investing the combined capital into the same master Indian real estate strategies.

What real estate sectors does Kotak Fund XII focus on? +

The fund utilizes a diversified approach across vital institutional real estate vertices in major metropolitan hubs (e.g., Mumbai, Bengaluru, NCR, Pune). Key target areas include premium residential real estate execution, ready/under-construction Grade-A commercial office structures, and data centers or industrial warehousing assets.

Who are the typical investors in Kotak's Real Estate Fund XII? +

This fund is engineered almost exclusively for institutional allocators. Marquee global investors, such as the Abu Dhabi Investment Authority (ADIA) and other premier global sovereign wealth and pension funds, look to Kotak to act as their domestic operating partner to manage large-scale real estate portfolios.

How is the fund regulated? +

The fund is fully registered and regulated by the International Financial Services Centres Authority (IFSCA) in GIFT City under the Category-II Alternative Investment Fund guidelines (Registration Number: IFSC/AIF2/2024-25/0179).

How does the GIFT City domicile benefit non-resident investors tax-wise? +

Investing through a Category-II AIF in GIFT City provides significant international tax efficiencies. Non-resident allocators are typically granted complete tax pass-through on specific income streams, lower withholding taxes under relevant Double Taxation Avoidance Agreements (DTAAs), and exemption from local Indian surcharges, resulting in optimized net-of-tax returns.

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