Date:12/10/2007 URL: http://www.thehindubusinessline.com/2007/10/12/stories/2007101253031600.htm

Back Marketmen looking for alternative investments

Taurus Parsoli plans Shariah-compliant Islamic fund

Nilanjan Dey

Kolkata, Oct. 11

If you thought that the Indian market has little room for alternative investments, think again.

Alternatives are in, although the size of the market is modest and the growth may be tardy.

Equity Scenario

Private banking circles, aware of the latest trends, point to far higher demand for alternatives in India. A section of India’s wealthy population, wishing to spread their portfolios over diverse categories of assets, will now look at these more seriously, they feel. The more observant among wealthy investors — having seen high yields, thanks to an upbeat equity scenario — will be more interested in including alternatives in their kitty, notes Mr Anup Bagchi, Head-Global Private Banking, ICICI Bank, who refers to a variety of opportunities that are emerging on this front.

Diversification

This demand, it may be mentioned, will be discussed at length at an alternative investment summit, being conceptualised by Terrapin, the event organisers for 2008.

Alternative investments are getting popular for entities seeking diversification and high returns.

As for specific products, infrastructure funds and private equity funds now figure among the alternatives that have lately witnessed greater demand.

Select pockets in the market are poised to see higher exposure to ETFs (exchange traded funds), commodities and structured products.

“Never was tactical asset allocation more significant for the Indian investor,” Mr Bagchi observed, adding that discerning clients are keen to understand the risks involved. Taurus Parsoli plans a Shariah-compliant Islamic fund, which, if cleared by the regulator, will be a first of sorts for the domestic asset management industry.

The proposed Taurus Parsoli Ethical Fund will be a five-year close-end equity-oriented fund, which will invest in a diversified portfolio of equities.

Muslim clients

The benchmark is a combination of BSE 100 and Parsoli Islamic Equity index.

Taurus MF has an arrangement with Parsoli Corporation; the latter offers Muslim clients the option to trade in listed Shariah compliant stocks, the offer document mentions.