Mumbai: Financial services firm, India Infoline is raising as much as $500 million from overseas financial institutions to set up a fund of funds, a top official told Reuters on Tuesday.
IIFL is raising the amount from institutions across Asia, West-Asia, Europe and the US for the Resilient India Growth Fund which will invest in Indian mutual funds, said Umang Papneja, president (products) at India Infoline.
“We have already started the road shows and the first tranche of investments is expected to come in a couple of weeks,” he said. “Its a global fund and we are targeting foreign institutions that do not have access to invest in Indian mutual funds.”
Overseas institutions are not allowed to invest in Indian-domiciled funds unless they have an FII license under Indian regulations.
The fund will invest in a diversified portfolio of Indian mutual funds across 8-10 asset managers. The investments could be in equity-related mutual funds and would be diversified by industry, sector and managers, Papneja added.
Foreign institutions have invested as much as $17.46 billion during the year 2009, as per the data from Indian market regulator’s website. FIIs have invested $1.7 billion in the first 15 days of 2010.
India Infoline recently got approval from capital market regulator Sebi and expect to start mutual fund operations by the first quarter of the next financial year.
“This would be different from our proposed mutual fund operations. We are raising funds overseas and will invest in domicile funds,” Papneja added.