UTI Intl raises $15 m for capital guaranteed fund

UTI International, a subsidiary of UTI Mutual Fund has raised close to $15 million in association with Societe Generale (SG) for its capital guaranteed fund, The India Capital Guarantee Notes-Series 1.

This is the first capital guaranteed fund to raised by the country by any mutual fund.

The corpus will be invested into a dynamic basket comprising of UTI MasterPlus and JPMF Liquidity. While SG remains the Capital Guarantor to the Fund, any upside from the Indian markets shall be captured through Masterplus.

UTI International, a 100 per cent subsidiary of UTIMF, registered in the island of Guernsey, administers and markets of various offshore funds.

Unnikrishnan, executive officer, UTI International, in e-mail response said, "The India Capital Guarantee Notes offers an alternative to traditional equity investments in the Indian capital market."

He added that through these six year Euro medium-term notes, structured around the MasterPlus, investors can benefit from the upside potential of the Indian equities market while protecting their capital at maturity.

MasterPlus is an open-ended diversified equity fund, managed by UTI AMC Pvt Ltd with an objective of long-term capital appreciation through investments in equities and equities related instruments, convertible debentures and derivatives in India.

On maturity, investors benefit from a 100 per cent capital guarantee provided by SG. However, investors can exit any time at the prevailing net asset value.

The corpus of the capital guaranteed fund is around $15 million and it has been primarily marketed in the Middle East.

Unnikrishnan said, "The market for such funds in India is quite virgin at this point, and the fund is essentially meant for offshore investors. Worldwide, funds of this nature have found increased acceptance in the last couple of years."