Dubai: India’s leading private sector bank ICICI has chosen Dubai for the global launch of a fund that will focus on India’s infrastructure and real estate sectors.
A lot of investors from the Gulf are keen on investing in the country’s infrastructure which would need nearly $500 billion in the few years.
ICICI Group Global Private Clients unveiled the ‘IOPM Infrastructure and Real Estate Fund´, a first of its kind offshore close-ended thematic fund. ICICI Bank is the sole arranger for the fund, which would be available for ICICI bank global private clients on a private placement basis.
Investment advisors to the fund would be under ICICI Bank’s asset management arm in India, ICICI Prudential Asset Management Co (IPAMC), headed by Nilesh Shah, ICICI Prudential AMC chief investment officer .
Launching the fund in Dubai, Ashish Kehair, head - Products and Strategy, Global Private Clients, ICICI Group, said that infrastructure and real estate were two of the most promising sectors in the Indian economy.
“With a staggering $500 billion planned investment in infrastructure sector in the next four years, and $50 billion investments in the real estate sector in the next three years, these two sectors will together propel the Indian economy into an different stratosphere and ensure double-digit GDP growth,” he said.
“We believe this fund presents the opportunity to participate in the Indian growth story and further capture the high growth rate in infrastructure and real estate sector. The fund will invest directly into listed equity related securities of Indian industries from the infrastructure and real estate sectors,” he added.
The real estate sector in India has witnessed a revolution both in terms of policy and in terms of growth. Over 30% annual growth in the sector is possible because of favourable demographics and liberalised FDI regime.
The twin features of the fund - drawdown and close-ended - are its main attractions. The drawdown facility provides the investors with the option of staggered investment by paying 50% of investment amount upfront and the balance within six months.
For the fund managers, too, the drawdown option provides opportunities to tap market movements to take beneficial investment decisions. The fund would also enable investors to make disciplined investments because it is a three-year close- ended scheme, with restricted liquidity after the first year.
The close-ended fund structure would help in better leveraging the long-term India story without the mundane pressures of redemptions typically faced by open-ended funds.
ICICI Prudential AMC manages corpus of more than $14 billion as on 31 December, 2007, and has one of the largest mutual fund investment team in India.
ICICI Bank’s international presence currently spans 18 countries and includes wholly-owned subsidiaries in the UK, Canada and Russia; offshore banking units in Singapore and Bahrain; a branch in Dubai among others.