ICICI Bank chose Dubai as the venue for the global launch of the fund.
ICICI Bank is the sole arranger for the fund, which will be exclusively available for ICICI Bank Global Private Clients on a private placement basis. Investment advisors to the fund will be ICICI Bank’s asset management arm in India, ICICI Prudential Asset Management Company (IPAMC) Limited, and it will be advised under the guidance of Mr Nilesh Shah, Chief Investment Officer, ICICI Prudential AMC.
Infrastructure and real estate are 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 altogether different stratosphere and ensure a double-digit GDP growth.
Mr Ashish Kehair, Head – Products and Strategy, Global Private Clients, ICICI Group, said “We believe this fund presents the opportunity to participate in the Indian growth story and further capture the high growth rate in infrastructure & real estate sector. The fund will invest directly into listed equity related securities of Indian industries from the infrastructure and real estate sectors.”
In the infrastructure sector, the government is assiduously encouraging public-private partnership. Positive, tangible results are already visible in sectors such as telecom and aviation. Sectors such as power and ports begin to gear up, there will be ample avenues for individual investors to partake from the stupendous growth in the sector.
Similarly, the real estate sector has witnessed a revolution both in terms of policy and in terms of growth. More that 30% annual growth in the sector is possible because of favourable demographics and liberalized FDI regime. Pertinently, the real estate sector has both forward and backward linkages with nearly 240 ancillary industries such as cement and steel, and a unit increase in the expenditure on the real estate sector has a five-fold multiplier effect on the income generating ability of these industries.
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 favourable market movements to take strategically beneficial investment decisions.
Additionally, the fund will enable investors to make disciplined investments because it is three-year, close-ended scheme, with restricted liquidity after the first year. The close-ended fund structure will help in better leveraging the long term India story without the mundane pressures of redemptions typically faced by open-ended funds.
The fund also has a unique provision to manage the market event risk by extending the maturity of the fund by two years (1 year + 1 year) in case of any sudden event resulting into a rough patch in the equity market at the time of redemption of the fund after 3 years.
ICICI Prudential AMC Limited manages corpus of more than $14bn as on December 31, 2007 and has one of the largest mutual fund investment team in India with 15 members having over 150 years of combined investment experience.
The ICICI Prudential AMC Limited is renowned for its expertise in investing into the listed Indian infrastructure space. As on December 31, 2007, the fund was managing/advising a large corpus amounting to $2.8bn in this sector.
ICICI Prudential Infrastructure Fund, with a corpus of $1.2bn, has been consistently outperforming the competitive infrastructure funds in India and has clocked a phenomenal return of around 92% within last one year against benchmark return of around 54%.
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