ICICI Venture Fund Management Pvt Ltd, the private equity arm of ICICI Bank, will raise as much as three billion dollars for an infrastructure and a real estate fund. The proposed real estate fund will invest in residential and commercial projects.
ICICI Venture will start the roadshows next week for a $1.5 billion fund, and may also look at raising a real estate fund of equal amount, ICICI Venture CEO Renuka Ramnath has been quoted as saying by Bloomberg. The proposed real estate fund will invest in residential and commercial projects in a dozen cities including New Delhi
and Mumbai. Most of the funds will be raised from investors in the US, Europe, Japan, Canada and the Middle East.
In September last year, Ramnath told Mint newspaper that it would raise $7.5 billion over three years for a variety of funds like real estate, hedge and mezzanine funds, besides a general PE fund. By the end of 2010, the firm plans to have over $10 billion capital under management.
ICICI Bank, which initially had plans to launch its own funds, recently said that it would not get into private equity business, leaving the entire turf to its PE arm.
Meanwhile, The Economic Times reported that Reserve Bank of India
) had chided ICICI Bank for using ICICI Venture as a front to make investments in businesses, which banks are not allowed to do from their own books.
RBI has told ICICI Bank to include its investments in the private equity arm in fulfilling the exposure limits that the bank has to follow under the prudential norms. The maximum exposure a bank can take to a company or a business
group is linked to its capital.