Abu Dhabi Investment Authority to invest $50 billion in India, says Suresh Prabhu

Abu Dhabi Investment Authority to invest $50 billion in India, says Suresh Prabhu

Union minister for commerce and industry Suresh Prabhu on Friday said that the Abu Dhabi Investment Authority, a sovereign wealth fund owned by Emirate of Abu Dhabi, will invest USD 50 billion in India, especially into infrastructure and food processing capacity, according to a Times of India report.

Speaking at the inaugural function of the annual venture capital summit in Panaji, Prabhu announced that the agreement has been signed on Thursday. Abu Dhabi-based sovereign wealth fund is interested in investing in India in a big way, he added.

According to the agency, Prabhu had also asked the International Finance Corporation to help attract other sovereign funds and pension funds to invest into India.

The Commerce Minister said that India is a top investment destination in the world today. Twenty states have their Startup policy. Suresh Prabhu stated that infrastructure is the sector where India is developing at a faster rate and this is creating lots of opportunities for investors.

He further remarked that India is one country where almost every citizen is an entrepreneur and where 600 million farmers and retailers take enormous risks. The fragmented Indian agricultural holdings provides great opportunity for startups to bridge the productivity gap by providing solutions using cutting edge technology like AI and drones.

Suresh Prabhu also declared Goa as the permanent venue for the Annual Global Venture Capital Summit. The Summit will take place in Goa on the first Friday of December every year.

Edited by Chitranjan Kumar

source =.”businesstoday”

ESR-Allianz Real Estate JV to invest $1 billion in India

Warburg Pincus-backed ESR is one of Asia’s largest developers and operators in logistics and warehousing. Photo: Bloomberg

Warburg Pincus-backed ESR is one of Asia’s largest developers and operators in logistics and warehousing. Photo: Bloomberg

Bengaluru: Asia Pacific-focused logistics developer e-Shang Redwood (ESR) has entered into a strategic partnership with global asset manager Allianz Real Estate to invest around $1 billion, including debt, into India’s rapidly growing logistics and industrial property market.

The joint venture will focus on developing large-scale logistics and industrial facilities in eight key cities—Mumbai, Pune, Chennai, Delhi, Ahmedabad, Kolkata, Bengaluru and Hyderabad—with an opportunistic approach to investments in other markets in India, the companies announced on Friday.

In addition, the investment programme will also identify opportunities to acquire assets in these cities.

“We are delighted to partner with Allianz, an existing strategic partner of ESR in other geographies. This JV with a leading institutional investor who has deep experience in Asia marks a key milestone in our regional growth plan,” Charles de Portes, co-founder and president of ESR, said in a statement.

The proposed investment programme will start with an immediate equity commitment of $225 million, to be funded on a 50:50 basis by Allianz and ESR. This would subsequently be converted into a $1 billion assets under management platform. The programme’s strategy is to leverage structural trends in tier one and selective tier two cities to build a long term, cash flow-positive logistics portfolio by acquiring a blend of develop-to-core, forward purchases, and stabilized or stabilizing assets.

On Thursday, ESR kicked off its first project in India, an industrial and logistics park in Chakan MIDC (Maharashtra Industrial Development Corporation), Pune.

Warburg Pincus-backed ESR is one of Asia’s largest developers and operators in logistics and warehousing, formed by the merger of e-Shang Cayman Ltd and Redwood Group Asia Pte. Ltd in 2016. Based out of Hong Kong and Singapore, it owns and manages around 7.3 million sq. m of assets in China, Japan, Singapore and South Korea.

Alongside the growth in the e-commerce sector in the country, the increasing internet and smartphone penetration, growing acceptance of online payments and favourable demographics will continue to propel e-commerce growth, spurring demand for modern logistics facilities, ESR said.

“India’s logistics sector is coming of age. The sector is benefitting from a lot of favourable trends, such as stellar consumption patterns, continued infrastructure spending, increasing transparency and the nation-wide implementation of a uniform indirect tax system,” said Rushabh Desai, Asia-Pacific CEO of Allianz Real Estate.

In India, the warehousing and logistics sector attracted investments of more than a billion dollars in 2017 and is witnessing a huge interest in building businesses around steady rental income. Canada’s Brookfield Asset Management Inc. is planning to enter the industrial real estate space, while Sydney’s LOGOS Group and Assetz Property Group from Singapore partnered in 2017 and are scouting for land. Embassy Industrial Parks Pvt. Ltd, Ascendas-Singbridge Group and Mahindra Lifespace Developers Ltd also plan to build industrial parks and clusters.

[“source=cnbc”]

Government looks to super funds to back $2 billion small business plan

Superannuation funds will be courted to participate in the federal government’s $2 billion push to increase funding for small business.

The government’s two part policy announced on Wednesday features a potential $2 billion investment in a  securitisation fund to help small businesses access debt finance outside the big banks and the “encouragement” of the establishment of a growth fund to provide longer term equity funding.

Mr Frydenberg told Fairfax Media on Friday there was a clear need for the funds “with the big banks responsible for more than 80 per cent of small business loans that are less than $2 million, there are few alternative funding routes.”

Treasurer Josh Frydenberg announced the two funds on Wednesday.
Treasurer Josh Frydenberg announced the two funds on Wednesday. Credit:Alex Ellinghausen

Securitisation fund

The securitisation fund will operate through the government buying bonds that are drawn from a pool of small business loans and providing cheaper funding to smaller banks and non-bank lenders through new or existing warehouse facilities.

The government will receive interest from these loans on a monthly basis which is where it will make its money and a well placed source said the government hopes superannuation funds will also participate in a similar way.

Ultimately the source said the government envisages it will not have to keep investing as the market matures which could take around three to five years.

Looking to superannuation funds

Joseph Healy, is the co-founder of SME lender Judo Capital, which is likely to benefit from the fund and said if the government is willing to invest money through the fund, superannuation funds may be willing to invest as well.

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“Being able to invest into the securitisation fund and access a pools of funds rather than individual funds is a much better way for SMEs to access the superannuation market,” he said.

Eva Scheerlinck, chief executive of the Australian Institute of Superannuation Trustees, said new investment opportunities are always welcome but it’s too early to say what the response will be from super funds.

“Super funds have a fiduciary duty to their members to ensure that every investment made is the right one for their portfolio and the investment outlook,” she said.

“At the end of the day, the assets that trustees invest in still have to be of investment grade and assessed against a rigorous criteria to ensure members get the best outcomes.”

Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck.
Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck.Credit:Steven Pam

Small business ombudsman Kate Carnell helped develop the policy and said the securitisation fund would encourage smaller banks and non bank lenders to lend to small businesses.

“For second tier banks the cost of lending is a mix of risk and cost of capital,” she said. “Why don’t they lend now?  The cost of capital is high and the dilemma of lending to small business or SMEs is that the risk is higher. By bringing down the cost of capital you can make the business case for some of these lenders to focus on small business.”

Small businesses having trouble securing finance

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Small businesses having trouble securing finance

Small businesses are being promised easier access to finance through a new $2 billion fund to be unveiled by the Morrison Government.

Growth fund

The second part of the government’s policy is to promote the establishment of a growth fund.

The government is consulting with the Australian Prudential Regulatory Authority and the banks over how the fund would work.

The fund would provide passive equity investment to small businesses to enable them to grow without taking on additional debt or giving up control of their business and is likely to be modelled on similar funds in the United Kingdom and Canada.

Since its establishment in 2011, the United Kingdom’s business growth fund has invested some $2.7 billion in a range of sectors across the economy.

Unlike a traditional private equity investment or a ‘Shark Tank’ style investment, businesses would not have to give up control or offer a board seat.

A similar fund doesn’t exist in Australia in part because the amount of capital APRA requires banks to hold for these investments makes it unprofitable for the banks however this treatment is under review.

The government’s role will be limited to setting up the rules around the funds operation and ensuring reporting and auditing.

[“source=ndtv”]