IL&FS arm's $100 mn infrastructure fund by April

IL&FS Investment Managers Limited (IIML) is all set to raise a $100 million fund focussed on infrastructure by early April. The fund will be the third one to focus on infrastructure from the IIML stable and the ninth fund overall. The company recently raised a $150 million cross-border fund.

IIML has entered a joint venture with Orix Corporation of Japan to form an asset management company to manage a Pan Asia Project Development Fund (Fund). Orix is one of the largest financial services corporations in the world.

The fund is co-sponsored by Orix and Infrastructure Leasing & Financial Services Ltd (IL&FS) and is being set up with a target corpus of $100 million. Orix and IL&FS have each committed $10 million to the fund.

This fund will finance the development of infrastructure projects in principal, Asian markets such as Indonesia, Philippines, Malaysia, Thailand, Vietnam and other Asian countries, including India. IIML will hold a 51 per cent stake is the proposed joint venture.

IIML is the asset management company of IL&FS and manages private equity and venture funds. Besides IL&FS , it has Asian Development Bank, International Finance Corporation and Bank of India as its institutional shareholders.

The company is understood to be going in for this fund as its two infrastructure funds, AIG Indian Sectoral Equity Fund (AISEF) and IL&FS Infrastructure Equity Fund (IIEF), have nearly been totally drawn down. AISEF was set up with a corpus of close to Rs 400 crore, while IIEF with Rs 245 crore. The company presently manages funds close to $400 million and this is expected to double shortly.

Said an industry analyst on the infrastructure fund, "It is only logical for IIML to go in for this fund as there is huge scope for investments in the rapidly-growing infrastructure sector in India. Airports, highways, energy are all on a roll and one can expect decent returns on such investments."

IIML has exposure in 75 companies and 40 per cent of the investments are in infrastructure and telecom firms, followed by manufacturing (23 per cent), life sciences (14 per cent), retail, media & consumer services (13 per cent) and information technology (10 per cent).

According to the company, they have been successful in achieving exits from a few of its investments through innovative financial structuring and IPOs.

It has achieved a churn of over 31 per cent of its portfolio and has successfully undertaken exits valued at Rs 500 crore at an average return of 33 per cent.