India Likely to Get Major Part of 2 StanChart Funds

November 13, 2007	(Be the first to rate this story!)  Loading ...
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MUMBAI: Standard Chartered is on the verge of launching a two billion-dollar Asia funds — one for the real estate sector and the other for infrastructure. Significant investment in India is expected from both these mega funds. The group is launching its $1-billion infrastructure fund in collaboration with IL&FS, while the $1-billion real estate fund is being launched with a Middle East partner.

The infrastructure funding needs are estimated at around $500 billion between 2007 and 2012. 70% of this is expected from the public sector. The remaining will come through private funding, which includes public-private partnerships. Given the fact that no other country has such a large absorption capacity, most of the global institutions are thinking of setting up infrastructure funds here.

ICICI Bank is also in the process of setting up a $2-billion infrastructure fund. Other in the list includes Citi, Blackstone and 3i as well as private sector banks like Axis Bank.

The infrastructure fund will be jointly managed by StanChart and IL&FS. “The fund will look at investments across Asia (ex-Japan). It will also provide an opportunity for Indian firms to tap opportunity in other Asian countries. According to bankers “The cost of implementing infrastructure using Indian know-how is 70% of any OECD country”.

The fund will have a life of 12 years, with a commitment of 4 years. Sources revealed that there is a good investor interest for these type of funds. This would be the first time that an Indian infrastructure financing company is involved in setting up a regional fund.

StanChart is likely to tie up with Isthimar, the Dubai-based investment firm for the real estate fund. As per sources, sizeable investments are likely to flow into India. Both the funds are likely to be launched in the next couple of months.

StanChart has been scaling up its infrastructure and real estate business in India. The infrastructure fund will make equity investments. In the real estate fund, other than the partners bringing in a part of the funds, they will also look at third party investors. The fund’s size could be increased depending on the interest of third party investors.

News Published Under:   Real Estate India |

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