Global investment major AMP Capital Investors is launching a $500 million equity fund sometime soon this year to invest in infrastructure in India and China. This will be the third such fund from AMP.
The company has already invested $100 million in Indian infrastructure from its earlier two funds and is planning to invest an additional $50 million. The major investments of AMP's infrastructure funds include Indraprasta Gas, Bharti Telecom and Pipavav Port.
AMP Capital also plans to raise a multi-million fund in 2008 to invest in Indian real estate. The fund will invest in shopping malls, industrial logistics, non-CBD (central business district) offices and IT offices across the country. AMP is entering real estate and equities in India after it exited the life insurance business in 2005. It sold off AMP Sanmar Life Insurance to Anil Ambani-controlled Reliance Capital.
"We want to bring both equity and expertise to India. We are the long-term holders of retail property and want to place equity on this basis. We will focus on smaller local players since the larger pan-Indian developers do not appear to require either equity or expertise. We will leverage on our Australian experience," said Simon Vinson, managing director, AMP Capital Investors, Singapore and head of Asian Property.
AMP is assessing medium term prospects for the development of retail property in the top 20 Indian cities. In the next stage, it would select the top 4 to 5 cities and identify suitable developers with whom it can work to build malls.
AMP Capital is also building an asset management team in India to invest in various assets including real estate and stocks.
"We see a great potential in the Indian real estate space. But, we are concerned about the land prices here. Rentals have gone up to unsustainable levels in the cities. But we will try to get best risk-adjusted returns to our investors," Vinson said.
AMP is also planning to invest in the Indian equities, betting on their high rate of returns. It plans to start investing in Indian equities by the end of June this year.
On asked about the rationale behind investing in the Indian stocks, Vinson said, "Compared with Indian markets, other markets have many competitors. In fact, we were the first firm to get QUIFI licence, which enables an entity to invest in Shanghai Stock Exchange. We are building capabilities to invest in Asian stocks."
Kevin Talbof from AMP's Australian team will head the Asian listed Assets Business in Singapore. This unit will oversee the equity investments in India.
AMP Capital Investors has funds worth $15 billion under management in Australia and New Zealand, while its parent AMP has assets of $107 billion under management. It has a team of 200 management staff in retail management in these countries. It has 44 properties ranging from 50,000 sq feet neighbourhood centres to 1.5 million sq feet mega malls.