Kotak Mahindra launches Indian mid-cap fund

India Mid-Cap is a Luxembourg-domiciled Sicav which invests in shares and equity-linked instruments, with the manager Nitin Jain taking a combined bottom-up and thematic approach to stock selection.

At launch the fund has a bias towards the themes of demographic-led consumption and infrastructure development. Jain looks for companies with a competitive advantage or a strong presence within a particular niche segment of the market, and the potential for rapid growth. He can also take the fund up to 35% in large caps.

Jain says: "As the global recovery has gathered pace, large-cap funds have seen big inflows as confidence returns to the market. The mid-cap arena, however, has been overlooked, particularly by foreign investors".

"The mid-cap market has traditionally been under-researched, meaning the sector has been left to local Indian investors with knowledge of the market. The Indian growth story and the strong long-term prospects of the economy mean that many of the companies in this space are large-caps in the making. The retail, media and pharmaceutical research sectors, for example, are all still in a fairly nascent state, and investors can benefit from the value creation in these sectors as they evolve over a period of time".

Minimum investment is $500 (£342). The group is aiming to raise $40m of assets for the fund within the next month.

The product is the latest addition to the four-strong Ucits III Sicav range managed by the group, which is a subsidiary of Kotak Mahindra Bank.