SBI Ventures to manage Rs 20,000 crore Maritime Fund

Mumbai: The government has picked SBI Ventures (formerly SBICAP Ventures) as the fund manager for the ₹20,000-crore Maritime Investment Fund (MIF) tasked with fundraising, structuring, managing and overseeing the investment portfolio aimed at catalysing capital into the sector, multiple sources said.

A formal mandate to manage the fund will be given to SBI Ventures soon, a government source said, adding that the development is expected to transform the funding requirements for the sector.

SBI Ventures was selected through a bidding process in which a consortium of Indian Infrastructure Finance Company and Climate Fund Managers was the only other contender in the fray.

SBI Ventures is an alternative asset management company with assets under management of around ₹30,000 crores ($3.5 billion). It is a wholly-owned subsidiary of State Bank of India, India’s largest lender and is the investment manager for Neev Funds, SWAMIH Investment Fund and various Fund of Funds.

The ministry of Ports, shipping and waterways did not respond to a mail seeking comment. The ₹20,000 crore Maritime Investment Fund is a key component of the ₹25,000 crore Maritime Development Fund approved by the Union Cabinet last year.

The union government will contribute 49% equity or ₹9,800 crore to the corpus of the Maritime Investment Fund through budgetary support.
The remaining 51% of the corpus will be raised from private and commercial investors, sovereign wealth funds, institutional investors, fund of funds, central public sector enterprises (CPSEs), public sector undertakings (PSUs), major ports authorities, and other eligible contributors.Through equity participation, the MIF aims to catalyse investment by adopting a blended finance model to enhance the availability of long-term, affordable and accessible capital for the maritime sector, government sources said.

The MIF will be set-up as a trust under the Indian Trusts Act, 1882 and registered as a closed-end Category I/ Category II Alternative Investment Fund (AIF) with Sebi (Securities and Exchange Board of India).

The fund could be structured as a single AIF or multiple AIFs, each with a focus on specific maritime sub-sectors.

The fund manager may also setup one or more feeder funds/fund of funds/co-investment vehicles in the International Financial Services Centres Authority (IFSCA) GIFT City to pool investments by global investors in the downstream MIF structures in India.

The fund will likely be structured to have multiple closes. At each close, it will be ensured that the union government’s commitment does not exceed 49% of the corpus raised during that close.

The first close will be achieved within 12 months from the date of Sebi registration, with an initial corpus of at least ₹5,000 crore.

The final close should be completed within 36 months from the first close. The investment period for the fund will be 5-8 years from first closing.