India's IDFC to raise hybrid infrastructure fund

The fund is reportedly targeting Rs5 billion and will primarily target unlisted infrastructure companies

IDFC Investment Advisors, a subsidiary of India’s Infrastructure Development Finance Company (IDFC), has launched IDFC Hybrid Infrastructure Portfolio, which is targeting Rs5 billion ($100 million; €75 million), according to India's Business Standard newspaper.

Focused on companies involved in infrastructure activities, the fund will target private equity deals and private investments in public enterprises.

Approximately 75 percent of the fund is allocated to unlisted investments. It will hold its investments for four to five years and expects returns of about 35 percent, the paper says.

In the last month, the fund has reportedly raised R2.5 billion, including Rs500 million from IDFC. It expects to raise the remaining INR2.5 billion from wealthy individuals.

The fund will be invested across 8-14 companies. No more than 40 percent of the fund will be invested in any single sector, with investments in individual companies capped at 20% of the fund total. 

Naval Bir Kumar, president and chief executive of IDFC’s asset management arm, told the paper that the fund would invest primarily in telecoms, energy, transport, IT and media, travel and tourism, and infrastructure-focused financial services companies. It will not invest in real estate, IDFC’s securities or its subsidiary companies, he added.

IDFC Investment Advisors is part of IDFC’s asset management business and provides public markets investment advisory services.