ICICI-Pru launches real estate fund

ICICI Prudential AMC has launched ICICI Prudential Real Estate Securities Fund, a three year close ended debt fund designed to invest in real estate sector and estate oriented sectors like cement, construction, metals, hotels, retail, banks and finance companies.
The units have face value of Rs 10 each. The new fund offer opened on Nov 15 and closes on Dec 14. The scheme proposes to provide repurchase facility at quarterly intervals. Entry load is nil. Prior to maturity an exit load of 3 per cent will be charged.
The fund will invest 51 per cent to 100 per cent in high yielding debt securities and 49 per cent in equity of companies, which are engaged in industries that are associated with or benefiting from the real estate sector or have investments in property.
The fund is the first real estate securities fund launched in India. It provides an opportunity to participate in an industry that is expected to grow at compounded annual growth of 33 per cent per annum over the next five years.
The fund will benefit from the profit potential of “Buy Acre and Sell Sq. Ft” through investment in the beneficiaries of the real estate sector. The fund is structured to control equity exposure given the current market valuations.
“The prospects for real estate industry in India look buoyant. All the factors which contributed to the growth of real estate sector – high disposable incomes, sharp increase in global liquidity, selective capital account liberalization, a greater availability of leverage due to financial liberalization and a consequent increase in mortgage lending and price increases – look set to continue,” said Nimesh Shah, managing director, ICICI Prudential AMC.

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