The fund aims to raise between Rs 1,500 crore and Rs 2,000 crore and will cater to the capital needs of unlisted companies, offering debt funds for acquisition financing and capital expansion.

The company will contribute 20% of the total fund size from its own resources. The goal is to complete the fundraising within the first year and deploy the funds promptly. Private credit funds provide debt financing to companies, serving as an alternative to traditional bank loans, particularly for businesses with lower credit ratings.

With this move, Kotak AMC joins other fund houses that have already ventured into the AIF space, capitalising on growing investor interest. Several asset managers, including Aditya Birla Sun Life Asset Management, have launched similar funds, reflecting the increasing demand for credit risk products in the market.

AIFs have seen rising commitments from ultra-high-net-worth individuals (UHNIs) and family offices, especially from Tier-II cities, with total commitments crossing Rs 12 lakh crore. The private credit segment, in particular, is witnessing significant growth, with some predicting India’s private credit assets under management (AUM) could reach $60-70 billion by 2028.