ING Group to launch India-specific fund

Financial services behemoth ING Group is planning to launch an India-specific fund for its offshore clients. This is the first time in more than 10 years that the Dutch group is looking to offer a product that will invest in the Indian equities market, which has been growing about 40 per cent in the last three years.

For domestic investors, the ING Investment Management (India), the mutual funds' arm of the ING Group in India, would offer a range of its global products, said Vineet K Vohra, managing director and CEO, in an interview.

"We are looking at an Indian product for our offshore clients such as institutions, non-resident Indians, and other general investors. We are trying to gauge the demand for such a product," he said. The global product would look to adopt the investment pattern of one of its equity mutual fund schemes in India.

The ING Group, which has over 80 million clients worldwide, through ING Funds has a Greater China and Russia fund, but no India-specific fund at the moment, according to its website. ING Investment Management handles over $486 billion globally, of which $91 billion is managed out of Asia-Pacific.

ING Investment Management has about 8-10 products in India. It is likely that the global product would look to offer a diversified equity product similar to its Domestic Opportunities Fund, an equity diversified scheme, which has been giving a return of nearly 50 per cent since its inception in August 2004.

The Domestic Opportunities Fund provides long-term capital appreciation from a portfolio that is primarily invested in companies which derive a significant portion of their revenues from the domestic Indian market place/economy - a pure India fund, which avoids companies that has reliance on the swings in the global economy such as information technology.

On the domestic front, ING Investment Management (India), which manages assets worth Rs 8,714 crore in India, will be launching a global real-estate fund for Indian investors. Globally, ING Group is the world's largest real estate fund manager, handling assets worth over $100 billion.

Vohra, who took over from Kavita Hurry as MD & CEO in June this year, said the proposed new product in India would be a feeder fund, which will invest into one of its existing global real estate fund. "Diversifying is the name of the game. Smart investors are already diversifying across asset classes, across geographies," he said.

Indians are one of the top three real estate investors in Singapore. In markets such as Dubai, the UK and Hong Kong too, Indians are among the top few, Vohra explained.

The Securities and Exchange Board of India (Sebi) last Wednesday hiked the individual cap for offshore investment schemes by fund houses to $300 million to encourage local investors to diversify their investments into geographies outside India. The total cap on overseas products was hiked to $5 billion.

Vohra said the decision to allow fund houses to invest in `investment grade foreign debt securities' would open up at least 40 markets for Indian investors. Under the earlier rule investments were allowed only in `Triple A' rated foreign debt securities.

He said the Indian mutual fund industry would see increased form of innovation and adoption of international concepts of investing in India.