Former SBI chairman Rajnish Kumar was on Friday appointed as the exclusive advisor to a USD 1 billion-stressed assets fund floated by the Kotak Mahindra Bank group. Kumar retired as the chairman of the country's largest lender in October last year after an over four-decade career. Earlier this week, there were reports of global private equity major Baring Private Equity Partners appointing Kumar as an advisor.
In a statement, Kotak Investment Advisors (KIAL) on Friday said Kumar will be the "exclusive advisor for its USD 1 billion special situation fund". KIAL had announced a fund raise of USD 1 billion in August 2019, anchored by a USD 500 million commitment from Abu Dhabi Investment Authority, a sovereign wealth fund.
According to reports, KIAL was to invest the money over a four-year period while the overall fund life was pegged at ten years. It can be noted that the quantum of sour debt is pegged at over 10 per cent of the banking system's assets and is widely believed to have increased because of the COVID-19 pandemic.
The fund looks for special situations where a company may be short of liquidity, stressed assets and cases being resolved under the provisions of the Insolvency and Bankruptcy Code (IBC) for its investments, according to its website. It will be looking for investments between Rs 350 crore to Rs 1,500 crore, as per media reports.