The Rs 500-crore venture capital fund floated jointly by LIC Housing Finance Company and LIC, will be launched in January.

The fund had received SEBI approval in the first week of November and was slated to be launched in December. However, the fund will now be launched next month, a senior official said.

Both LIC and LIC HF will have a combined contribution of Rs 100 crore, with both contributing 10 per cent each of the fund size.

Mr Arun Goel, CEO of LIC HFL Asset Management Company, said the fund is in the process of finalising 3-4 major banks as its distributors who will market the fund to institutional and non-institutional investors. “We will launch the fund in mid-January. After the distributors are finalised, the fund raising process will start,” he said.

Mr Goel, however, said the recent bribe for loan scandal has not in any way delayed the launch of the fund. Mr Goel said the delay in the launch was because the time taken for appointment of distributors. “Most of the banks due to their MNC status have to receive approvals from abroad, which is causing a delay,” he said.

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He said that the scam will not have any impact on the fund-raising of the venture capital fund. “We have not yet gone to the market to raise funds. I do not see raising funds will be an issue,” he said.

The fund is targeting both institutional and non-institutional investors — ultra high net worth individuals, trusts and financial institutions.

The fund will invest mainly in affordable housing with some investments in commercial real estate. “The exact composition will be decided after the distributors are finalised and we take their feedback,” said Mr Goel.

The fund will initially invest only in the domestic market. For investing in the overseas market, a new fund may be launched.

The Rs 500-crore fund was initially planned with a green-shoe option of Rs 100 crore which was later increased to Rs 250 crore

Source : The Hindu Business Line