Taib invests $60 mn in IL&FS fund

Taib Bank has emerged as the largest lead foreign investor in the $153 million Leverage India Fund anchored by IL&FS Investment Managers Limited (IIML).

Taib Bank is learnt to have contributed close to $60-70 million for this fund which is IIML seventh fund and the largest one so far.

According to industry sources, Taib Bank wishes to encash on the robust growth in the Indian economy.

In addition to this, Taib Bank has an investment arm in India which sources funds from global high networth individuals (HNIs) and invests in Indian firms. "Taib Bank does not have an India focussed fund and with this route, they are leveraging on the growth here," they said.

No official confirmation were forthcoming from Taib Bank. In addition to Taib Bank, Punjab National Bank has also made a significant contribution to this fund. Envisaged to be a $100 million fund, this was however closed at $155 million during early November.

The India Leverage Fund from IL&FS has been preceded by AIG Indian Sectoral Equity Fund with a corpus of Rs 364 crore, the South Asia Regional Apex Fund with a corpus of Rs 110 crore, India Project Development Fund with Rs 91 crore, and India Auto Ancillary Fund with Rs 65 crore.

The company has also had two IT focussed funds, Tamil Nadu Information Technology Fund with a Rs 25 crore corpus and Information Technology Fund with Rs 10 crore, besides another fund with a less than Rs 10 crore corpus.

Taib Bank was attracted by the fund design to cater to the varying risk appetites of investors. "The fund offers preference units with a capped return and an attendant lower risk for investors choosing to maintain such a profile. It also has regular equity units with unlimited return for investors with a higher risk appetite and a longer-term investment perspective," according to IL&FS.

The ratio of preference to equity in LIF is 40:60 and the structure has facilitated the participation of relatively new entrants in private equity investments, a statement from IL&FS added.

It said, this fund is focussed on expansion-related growth opportunities in sectors as diverse as infrastructure, life sciences, textiles and IT where India has a globally competitive advantage.

With this closure, IL&FS Investment Managers now has over $400 million under active fund management.

"The buoyant phase of the economy gave a parallel fillip to private equity industry, providing abundant investment opportunities and the fund has started deploying money after the first close," Shahzaad Dalal, MD, IL&FS Investment Managers, had said.

IIML is the asset management company of IL&FS and, besides IL&FS, has Asian Development Bank, International Finance Corporation and Bank of India as its institutional shareholders.