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Kolkata/Mumbai, April 12

UTI Venture Funds has announced the first closure of Ascent India Fund, a Rs 700-crore private equity fund.

The new fund, which will have a mid-market focus, will identify promising Indian companies. The key investment theme will be India's outsourcing strengths, both in services and manufacturing. It will concentrate on areas such as technology, BPO, auto ancillaries, pharma and textiles.

A press release issued by UTI Venture Funds has quoted Dr R.H. Patil, Chairman, UTI MF, remarking that the new fund will help it to further consolidate position in the private equity business.

Mr P.P. Prabhu, Chairman, UTI Venture Funds, has commented that the bulk of funds currently flowing into "Indian PE deals" come from abroad. "We are raising predominantly domestic capital in order to bring the benefits of investing in this alternative class of assets to Indian banks, insurance and other companies," he has stated.

According to officials, they have raised Rs 450 crore for Ascent India Fund.

Ascent India Fund, which expects to commence investments soon, has lined up deals in the textile and auto ancillary industries.

UTI Ventures will now be in a position to attract and manage larger funds, it is felt. Large sums have been raised from investors in a relatively short period of time.

The fund management team at UTI Venture Funds (which has already handled their first fund, ITVUS) is said to embody a blend of public markets experience and private equity investments. ITVUS, which has interests in technology, life sciences and outsourcing sectors, has so far made two distributions.

UTI Venture Funds has tried to combine domestic and international investors. A number of banks, insurance companies and investment outfits have committed to Ascent India Fund; the latter has also attracted strong demand from international investors, including hedge funds, the press note has stated.

UTI Venture Funds' investments include Glenmark Labs, Subex Systems, Scandent Solutions, MoSchip and Strand Genomics.

According to Mr K.E.C. Raja Kumar, Managing Director and Chief Executive Officer of UTI Venture Funds, ITVUS, saw over 1,000 deals and returned 30 per cent of the capital to the investors. For the Ascent India Fund, too, UTI Ventures is targeting a return of over 30 per cent, he added.

(This article was published in the Business Line print edition dated April 13, 2005)
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