After foreign institutions and private sector banks, it is now the turn of public sector banks to set up infrastructure funds. State Bank of India, the country’s largest bank, along with Macquarie Capital Group, on Wednesday announced its intention to raise a new $2-billion infrastructure fund.
SBI and Macquarie Capital will hold 45% each in the proposed fund management company, while the International Finance Corporation (IFC) will hold the remaining 10%. Macquarie, SBI and IFC together plan to contribute a total of $450 million in anchor investments to start the fund, which will raise further capital from both domestic and international institutional investors. The fund is scheduled to be launched by the end of the second quarter of 2008.
The fund intends to provide equity and equity-like capital for investments in traditional infrastructure such as roads, ports, airports and power.This is the first private equity fund launched by SBI, and it plans to have different tie-up for other sectors.SBI chairman OP Bhatt will be the chairman of the company, while CEO and MD will be appointed by Macquarie Capital.
Unlike other funds, this new fund is unlikely to go in for a minority stake of 5%. With the backing of Macquarie, which is known for its infrastructure powers, the fund would look for larger equity play and also an influence over the assets.It will also look at investment opportunities in infrastructure-related assets and businesses.
Read more in The Economic Times article.
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