UTI AMC to set up PE fund for core sector

The country’s leading fund house, UTI Asset Management Company, is entering the private equity space. It has joined hands with HSH Nord Bank of Germany and Shinsei Bank of Japan to float $600 million private equity fund which will focus on infrastructure sector.

All the three partners have already made a commitment of $25 million each towards the fund. UTI has turned its focus on the infrastructure. In the last calender year, the financial institution launched a mega infrastructure mutual fund, targeting investments in listed companies. The total fund requirement of country’s infrastructure is pegged at $380 billion over the next five years. The PE fund comes at a time when UTI is planning an IPO.

In the last calender year, infrastructure and real estate sector had attracted close of $2 billion investments. Sources said this PE fund would focused on infrastructure companies and SPVs and rest of the funds would be raised over next two years.

25 foreign investors line up for UTI AMC stake

Private equity firm Blackstone, Goldman Sachs, UBS, Citigroup, National Australian Bank and Shinsei Bank are likely bidders for an equity stake in India’s oldest fund house, UTI Asset Management Company (UTI AMC).

Close to 25 overseas institutional investors have evinced interest in picking up a stake in the country’s third largest mutual fund. UTI AMC plans to offload 20% stake through a private placement and 29% through an initial public offer. However, no single investor would be able to hold more than 5%.

The private placement is expected to be completed by January while the initial public offer is slated for February-March. The listing process has to be completed before March 31, 2008. The fund house could raise about Rs 6,000-8,000 crore through the combination of private placement and initial public offer.

Read more in The Economic Times article.

UTI likely to sell 15% in AMC to global player

UTI Mutual Fund, owned equally by Life Insurance Corporation and three public sector banks, is likely to rope in a strategic partner by offering 15 per cent equity in the Asset Management Company, ahead of its Rs 2,000 crore ($ 500 million) initial public offering (IPO).The strategic partner is likely to be an international player, having a presence in developed markets, said sources.

The strategic partner would be offered a slot on the UTI AMC board with a view to bringing in technology expertise and international knowhow, among other things.

The existing shareholders — LIC, State Bank of India, Punjab National Bank and Bank of Baroda (they are financial investors) — would be diluting a combined 20 per cent stake in the Mumbai-headquartered fund house during the IPO. Post-listing, UTI MF will become the first mutual fund house in India to be traded on the stock exchanges.

Shareholding by the four state-owned entities, which bought the entire government holding in 2005 by acquiring 25 per cent stakes each in UTI AMC, would come down to a combined 65 per cent after the strategic stake sale and IPO. They had bought the government’s stake in the fund house in 2005 for Rs 1,236 crore — a blockbuster investment considering that the AMC is currently valued between Rs 6,000 and 8,000 crore within less than three years.

UTI AMC has close to 8.5 million customers and it is the third biggest fund house (after Reliance and ICICI-Prudential MFs) with assets under management of over Rs 45,000 crore.

Read more in The Business Standard article.

UTI AMC to sell 49 pc stake through IPO

Leading mutual fund player UTI AMC on Wednesday said its board has approved a proposal to sell 49 per cent stake through an Initial Public Offer by the end of this fiscal.This will be the first-ever public offer by a mutual fund house in the country.

The four sponsor companies, State Bank of India, Punjab National Bank, LIC and Bank of Baroda, own 25 per cent stake each in UTI AMC. Post-IPO, their combined holding will come down to 51 per cent.The decision to go for an IPO was taken by the company's board at its meeting yesterday. The government had earlier cleared the IPO proposal.

The mutual fund house was formed after splitting the then UTI following a fiasco in its flagship scheme, US-64, in 2001.he proceeds of the issue will be used to fuel the company's increasing business needs.

SBI, LIC, others to dilute 50% in UTI MF via IPO

UTI Asset Management Company will float an initial public offer by March-end next year to help its sponsors, SBI, LIC, PNB and BoB, offload up to 50%.

UTI Asset Management Company Ltd chairman and managing director U K Sinha told PTI that the board of the company had recently approved the proposal to offload up to 50% stake held by the four sponsors.State Bank of India (SBI), Life Insurance Corporation of India (LIC), Punjab National Bank (PNB) and Bank of Baroda (BoB), individually hold 25% stake each in the asset management firm.

Sinha said UTI AMC would probably be the first domestic mutual fund in the country to go for an IPO, through which the four sponsors would make a partial exit.He said the details on the valuation of the company were being worked out.The valuation of the firm was last done in November 2005, when the four sponsors bought stake in it.

LIC, SBI in race to manage pension funds

Public sector entities Life Insurance Corporation, UTI AMC, State Bank of India and Punjab National Bank are among the front-runners to become pension fund managers under the new pension system.

The direct and indirect foreign investment in pension funds will not exceed 26 per cent. The Pension Fund Regulatory and Development Authority (PFRDA) recently invited expressions of interest for managers. The last date to apply is May 25, 2007.

The selected sponsors will have to incorporate the pension fund as a separate public sector company in which direct and indirect foreign investment will not exceed 26 per cent.PNB is likely to have US-based Principal Financial Group as the foreign partner.

According to official sources, there will be 2-3 fund managers from the public sector as the scheme at the moment is for central and state government employees. Private fund managers are likely to be allowed after the scheme is made available to other citizens of India in due course.

According to the criteria, a sponsor to be eligible for fund manager must have at least five years of experience of fund management and average assets under management of sponsors must not be less than Rs 10,000 crore.

Read more in The Busienss Standard article.