The state-owned Life Insurance Corporation or LIC has decided to launch a Rs.500 crore venture capital fund exclusively for infrastructure, reports said.
The company has decided to sponsor one of the proposed infrastructure debt funds or IDF and enter the venture capital or VC business to diversify operations. It already approached the Insurance Regulatory & Development Authority (IRDA) for its approval to be an IDF sponsor.
Confirming the development, LIC acting Chairman D.K. Mehrotra said the VC fund would be launched in the next few days, adding that its housing subsidiary LIC Housing Finance (LICHF) would float the fund.
LICHF CEO V.K. Sharma said marketing of the fund – named LICHF Venture Capital Fund – has started and there would be a formal launch this month. The VC fund's focus would be to invest in urban real estate and infrastructure.
LIC has appointed Arun Goel as the CEO of the fund.
Though LIC will be the sole investor to start with, it could also rope in banks, financial institutions or even high net-worth individuals, as one of the partners.
IDFs are expected to play a key role in making long-term capital available for infrastructure projects. IDFs can be set up as trusts regulated by capital market regulator Securities and Exchange Board of India or as companies regulated by the Reserve Bank of India. A trust-based IDF will normally be a mutual fund. Foreign pension and insurance funds are expected to invest in IDFs.
LIC has three subsidiaries – LIC Mutual Fund , LICHF and LIC Pension Fund.
Source: RTT News