UTI AMC to set up PE fund for core sector

NEW DELHI: The country���s leading fund house, UTI Asset Management Company, is entering the private equity space. It has joined hands with HSH Nord Bank of Germany and Shinsei Bank of Japan to float $600 million private equity fund which will focus on infrastructure sector.

To begin with, all the three partners have already made a commitment of $25 million each towards the fund, sources told ET. UTI has turned its focus on the infrastructure. In the last calender year, the financial institution launched a mega infrastructure mutual fund, targeting investments in listed companies. The total fund requirement of country���s infrastructure is pegged at $380 billion over the next five years. The PE fund comes at a time when UTI is planning an IPO.

In the last calender year, infrastructure and real estate sector had attracted close of $2 billion investments. Sources said this PE fund would focused on infrastructure companies and SPVs and rest of the funds would be raised over next two years.

UTI already has a 51:49 joint venture company with Shinsei Bank ������ UTI International (Singapore) for launching mutual funds.

base of 5-crore shares, will be expanding it equity base. The government nominees, including State Bank of India, Punjab National Bank, Life Insurance Corporation and Bank of Baroda, will hold a 51% stake in the fund house after the listing.

At present, all four investors hold 25% stake each. Each would dilute 5% in the private placement and another 7.25% in the IPO. The government nominees had spent Rs 1,200 crore in buying UTI���s equity in 2005.

UTI AMC was created in 2003 after the operations of India���s first mutual fund, Unit Trust of India, were split after many schemes of the old UTI went bankrupt. The government had transferred the net asset value-based schemes to the AMC while some schemes promising sguaranteed returns (including the famous US-64) were housed in a separate vehicle called special undertaking of UTI..