The private clients division of India’s ICICI Group has chosen Dubai as the venue for the global launch of the IOPM Infrastructure and Real Estate Fund, an offshore closed-ended thematic f
The private clients division of India’s ICICI Group has chosen Dubai as the venue for the global launch of the IOPM Infrastructure and Real Estate Fund, an offshore closed-ended thematic fund that will focus on India’s infrastructure and real estate sectors.
ICICI Bank is the sole arranger for the fund, which will be exclusively available to its private clients on a private placement basis. The investment advisor to the fund is the bank’s asset management arm in India, ICICI Prudential Asset Management, under the guidance of chief investment officer Nilesh Shah.
The bank says infrastructure and real estate are two of the country’s most promising sectors, with no less than USD500bn in investment planned for the infrastructure sector in the next four years and USD50bn earmarked for real estate sector over the next three.
In the infrastructure sector, the government is encouraging public-private partnership, with tangible results already visible in areas such as telecoms and aviation and others such as power and ports starting to gear up.
‘We believe this fund presents the opportunity to participate in the Indian growth story and further capture the high growth rate in the infrastructure and real estate sectors,’ says Ashish Kehair, the group’s head of products and strategy for global private clients. ‘The fund will invest directly into listed equity-related securities of Indian industries from the infrastructure and real estate sectors.’
The fund offers a drawdown facility that provides investors with the option of staggered investment by paying 50 per cent of the total investment upfront and the balance within six months, while giving the fund managers the opportunity to exploit favourable market movements. And as a three-year, closed-ended scheme, with restricted liquidity after the first year, the fund will not be affected by redemptions in the same way as open-ended structures.
The fund has a provision to manage market event risk by extending the maturity of the fund by one or two years in the event of unfavourable market conditions at the scheduled time of redemption of the fund after three years.
ICICI Prudential Asset Management manages more than USD14bn and is renowned for its expertise in Indian infrastructure, managing USD2.8bn in assets in this sector at the end of last year. The USD1.2bn ICICI Prudential Infrastructure Fund has consistently outperformed its sector, returning some 92 per cent last year compared with a benchmark return of around 54 per cent.
ICICI Bank is India’s largest private sector bank with assets of USD96bn at the end of December, offering a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through specialised investment banking, life and non-life insurance, private equity and asset management subsidiaries.
The 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, branches of ICICI UK in Sri Lanka, Hong Kong, Qatar and Belgium, and representative offices in the US, China, United Arab Emirates, Bangladesh, South Africa, Indonesia, Thailand and Malaysia.
