Soon after State Bank of India chairman OP Bhatt's announcement of the bank's plan to venture into the private equity (PE) business, SBI Mutual Fund has followed suit. SBI MF said it is venturing into the PE sphere by earmarking 10% of the proceeds of its just launched close-ended fund, Infrastructure Series I Fund, for investing in unlisted companies. This will be the first time SBI MF would be investing in unlisted companies.
“According to existing Securities & Exchange Board of India guidelines, close-ended mutual funds can park up to 10% of the corpus in unlisted companies. From our infrastructure fund, we plan to set aside a similar portion of the corpus for investing in yet-to-be-listed companies in the infrastructure sector,” SBI Funds Management Pvt Ltd head of equity Sanjay Sinha said.
This will be SBI MF's first such investment. Apart from the Infrastructure Series I Fund, which is a three-year close-ended fund, at present open for subscription, SBI MF has another close-ended fund called SBI One India Fund.
For its private equity investments, SBI MF, considered to be the country's best performing fund house, would be looking at an exit option not beyond three years.
“Since the fund would convert into a open-ended one in three years' time, we would be looking at exiting the unlisted companies within this timeframe,” Sinha said.
He said the fund house, along with Societe General, is considering launching an overseas fund to be managed by it and marketed by the latter.
Sinha also said SBI MF is considering launching a whole gamut of sectoral exchange traded funds and is currently working on several products.
Source : Financial Express