Ing Group Plans $300m Investment

The $272-billion ING group is setting up two dedicated funds and two regional investment funds with an estimated exposure of $300 million in India.

The group is also looking at investment opportunities in the countrys real estate and insurance sectors and will soon apply to the government for permission to set up a representative office for entry into the life insurance business.

Baring Private Equity Partners Ltd, which has set up a wholly-owned subsidiary company in the country, has already arranged a general fund with an initial corpus of $60 million to be invested over 12 to 24 months in private companies in the country.

 

This will be followed by a dedicated India fund, which has been planned for next year with an estimated investment corpus of about $150 million, said John A Dare, chairman, Baring Private Equity Partners.

Two other Singapore-based regional funds are expected to tap investment of about $75 million in India.

One is the $100-million Baring Communication Equity Asia - a specialist fund focusing on media and telecom.

The other is the $150-million Pan Asia Fund, to be launched later this year. ING expects to generate 30 per cent of these funds business from India.

The Baring India Fund, which has attracted investment from international financial institutions including pension funds and insurance companies, will initially target about eight to 10 small and medium-sized companies in the country.

The stake of the Baring fund in any investee company will be in the range of 20 per cent to 40 per cent of its equity capital.

We would like to hold substantial minority positions in the investee companies, where we can be on their boards and executive committees and have some say in the decision-making process, without management control, said Dare.

ING plans to adopt the exit route of selling out its stake in the investee company to the domestic partner or to a third party at the end of the life span of the fund. All discussions, including the option to go public in case of a privately held company, will be discussed upfront, Dare added.

However, the Baring India fund, with a nine-year life span, has decided to stay away from any financial exposure to the high-risk infrastructure secto.

Instead, the group plans to focus primarily on service enterprises.

ING, which made its first real estate foray in Asia through a joint venture for a housing project in Beijing this year, is also assessing the Indian real estate market.

Currently, the ING groups total commitment to India is approximately $1 billion, including $400-million banking exposure to major Indian corporates through ING Bank and ING Barings Investment Bank, $200 million invested in stocks through Baring Peacock Fund, and $200 million raised by ING Baring Corporate Finance in the international markets for 15 companies over the last four years.