Preheat oven to 375ºF (190ºC).
Generously butter large kugelhopf pan or 10-inch (4 L) tube pan. Sprinkle with 1/4 cup (50 mL) of the pecans. Set aside.
In small bowl, dissolve 1 teaspoon (5 mL) of the sugar in warm water. Sprinkle in yeast; let stand for 10 minutes or until frothy.
Meanwhile, in small saucepan, bring raisins and 1/3 cup (75 mL) water to boil; reduce heat to medium-low, cover and simmer for 3 minutes. Set aside.
In large bowl, beat butter with remaining sugar until light and fluffy. Beat in eggs, 1 at a time, until blended. On low speed, beat in yeast mixture, milk, lemon rind and salt. Beat in 2 cups (500 mL) of the flour; beat at medium speed for 5 minutes. With wooden spoon, stir in raisins, remaining nuts and enough of the remaining flour, 1/2 cup
(125 mL) at a time, to make slightly stiff sticky dough. Turn into prepared pan.
Cover with greased waxed paper; let rise in warm draft-free place for about 1 1/2 hours or until 1/2 inch (1 cm) from top of pan. Bake in centre of oven for 45 to 50 minutes or until cake tester inserted in centre comes out clean. Invert onto rack; let cool. Dust with icing sugar.