UTI International to launch $300 m infrastructure fund

The largest domestic mutual fund UTI Asset Management Company is launching a $200-300 million offshore infrastructure fund. The fund is being launched through the company's subsidiary UTI International, Chairman and Managing Director UK Sinha said.

To take advantage of the recent India-Singapore double taxation avoidance treaty, UTI AMC has decided to have Singapore as the domicile for its second offshore infrastructure fund.

Further, the presence of several global funds in Singapore will also help the company attract investors to the fund.

The launch of its second offshore infrastructure fund is coinciding with the expected close of its first infrastructure fund in the coming months. UTI AMC's first offshore infrastructure fund returned 35 per cent CAGR (compounded annual growth rate) in dollar terms since its inception in late 1999.

According to Sinha, UTI International will have roadshows for its Japan-specific private equity fund, UTI Shinsei, in Japan later this year. The fund has a projected corpus of $200 million.

Elaborating on UTI MF's overseas plan, he said it was in the advance stage to form a joint venture asset management company in Thailand. "A government bank as well as a private sector bank has evinced interest in setting up an AMC with us in Thailand. We are evaluating the potential there," Sinha said.

According to the CMD, the company is closely looking at some emerging markets for starting AMC operations. "We have not yet decided on any other countries but are definitely looking for opportunities," he said.

Sinha further said UTI MF was keen on entering the outsourcing sector by acquiring an IT firm.

Ashish Ranawade, head of portfolio management services at UTI AMC, said, "Our first infrastructure fund has given us immense wealth of experience. The second infrastructure fund comes on the back of the excellent returns given by our first fund."

Ranawade was managing UTI AMC's first offshore infrastructure fund for sometime. "We will be closing our first infrastructure fund this year and return the money to our investors," he said.

The second offshore India Infrastructure Fund would invest in unlisted and listed companies in sectors such as power, transportation, oil & gas, telecom and urban infrastructure, according to Sinha

UTI AMC has roped in pilot investors for the second fund and a European bank has agreed to be the anchor investor in the proposed fund. It has also received regulatory approvals by the Securities and Exchange Board of India, Ranawade said.

The fund will be managed by Yashwant Kini, who has 16 years of experience in the industry. Before joining UTI AMC for managing the infrastructure fund, Kini was with Morgan Stanley BPO, heading its research division. The second fund has a tenure of 5-7 years.

This will be UTI AMC's fifth offshore fund, after its India Fund (launched in 1986), India Pharma Fund, India IT Fund and the first India Infrastructure Fund.