Dutch Fmo Plans $50m Funds Management Co

FMO, the $1.25-billion Netherlands Development Finance Company, is all set to make a make a foray in India for creating between a $32-50 million 'funds management company' by 1998 end.

FMO (Nederlandse Financierings-Maatschappij Voor Ontwikkelingslanden NV), which has a balance sheet total of $1.251 billion for 1997, plans to first create a subsidiary in India which will be converted into a 'funds management company' later.

The Dutch finance and venture capital company, which has already invested in seven Indian companies, plans to focus on investing in infrastructure, information technology, healthcare and retail market segments. Service and warehouse management companies are also on the list of investment.

 

"We're looking for grown companies with a clean international competitive edge," Jan L T Faber, equity department, FMO, told Business Standard. "Especially, healthcare management, which is undeveloped in many developing countries, will be a major focus," he said.

FMO, whose approved financing increased to $426 million in 1997, is a private company with government and private companies sharing 49:51 equity. Besides the Dutch government, its shares are held by ABN Amro, ING Barings, Philips Pension Fund and a group of smaller shareholders.

According to Faber, the creation of FMO's subsidiary in India will bring proven basic ideas from the Netherlands to India. "We've know-how in input management," he said, adding that the company would like to work closely with Centre for Technology Development (CTD) based at Indian Institute of Science (IISc) to offer its know-how.

Another premier agency on the list of collaboration is Indian Institute of Science, Bangalore for 'commercialising of good technologies' developed by IISc. "We'd like to explore and tap good technology in India," he said.

FMO has already invested in East India Petroleum Ltd, an Indo-Dutch joint venture, in India. However, Faber clarified that investments into Indian companies would not be restricted to those which have dealings with the Netherlands.

The FMO's core operations consists of providing long-term financing including loans and share participation.

Almost 49 per cent of the FMO's portfolio consists of finance provided to financial institutions and investment funds. It also provides venture capital to starting companies and financial institutions as part of the 'seed capital developing countries programme'. So far, 80 per cent of the FMO's financing has gone to 'low income' and 'lower-middle income' countries. Between 1991-1997, 3,925 companies received FMO financing amounting to nearly $13 billion. This created about 1,31,000 full-time jobs and another 10,500 part-time jobs.

While it operates 20 investment funds the world over, FMO's portfolio spreads over 66 countries.