ICICI Launches Real Estate Security Fund
ICICI Prudential Mutual Fund recently launched its real estate securities fund, which is the first real estate mutual fund in India. The new fund offer is open for subscription from November 15 to December 14, 2007. The fund will invest 51 per cent of its portfolio in high-yielding debt securities issued by real estate companies. The scheme will not directly own or hold real estate. It will invest up to 49 per cent in the shares of companies that will benefit from the real estate sector or have substantial investments in property. Debt securities issued by real estate companies have relatively low liquidity. Hence, in order to manage the liquidity risk, the fund has been designed as a 3-year close-ended fund. It will invest in real estate and related sectors such as cement, construction, metals, hotels, retail, banks and finance companies. According to National Housing Bank, India will have a shortage of over 20 million housing units and an incremental demand of 8-10 million each year. The country will need an investment of $25 billion in the retail segment by 2010 to meet the growing demand for malls and multiplexes. The need for commercial and hospitality facilities is also huge.
