ICICI Catches The PE Buzz, To Roll Out FoF

ICICI Bank is leveraging its size and international clout to grab a big chunk of private equity investments, by launching a fund of funds — the first by any Indian entity. The country’s second-largest bank, which has successfully sold the ICICI Bank story abroad by raising $11 billion through debt and equity during the current fiscal, is seeing an unsatiated appetite for Indian paper.

Although the size is yet to be finalised, the bank is looking at eventually a multi-billion dollar fund to invest in other India-related funds — an area which has been the domain of multinational institutions. FoFs are essentially investor groups that invest in private equity funds in order to provide investors with a lower-risk product through exposure to a large number of investment vehicles across sectors and even geographies. It would also help investors to route investments in some funds, which could be closed to them.

An ICICI Bank official confirmed the move, which is still in its early stages, adding that the fund will be launched by ICICI International Mauritius, a subsidiary of the bank. The Mauritius subsidiary is an investment and fund management company of the group. Both the $2 billion infrastructure fund, which is in the pipeline, and the fund of funds are being launched by the same entity.