Birla Sun Life AMC launches Special Situation Fund

PFW Bureau / Dec 13 

Birla Sun Life Asset Management Company launched Special Situations fund. The NFO is a an open-ended diversified equity scheme which will open on December 17, 2007.

The fund plans to invest 80 per cent of the proceeds in equity and the remaining 20 per cent in the fixed income securities. The offering comes with both dividend and growth variants.

The investment objective of the scheme is to generate long-term growth of capital by investing in a portfolio of equity and equity related securities. The scheme would follow an investment strategy that would take advantage of Special Situations and Contrarian investment style.

Special situations have been known to enhance the value of the businesses that eventually gets reflected in share prices. The investment strategy is all about identifying those stocks that have either undergone or have the potential of special situations.
Mukul Gupta, CEO, Birla Sun Life Mutual Fund said, “India Inc is witnessing a spate of special situations. Mergers and Acquisition deals, private equity investments, open offers and buybacks have become the order of the day. This trend is expected to continue in the future, as most quality companies would plan for expansions, enter new business lines and restructure existing businesses. We would use our investment expertise to identify the right special situations in our new fund that can generate superior returns.”

India saw a 180 per cent increase in FDI year on year in 2006-07 from USD 5.6 bn to USD 15.7 bn.  M&A and private equity deals, saw an increase of 67 per cent in number terms (467 to 782) and 54 per cent in terms of value (Rs 73200 crores to Rs. 112800 crores) in 2006. Similar trends have been observed in the number of open offers, delistings, business restructuring, IPOs etc.

Birla Sun Life Special Situations Fund would endeavor to capture the special situations that result from corporate actions, market dynamics or a blend of both.

Key points of the open ended diversified equity scheme :

· To invest in businesses that are candidates for M&A, de-merger, PE targets, buyback and asset play.
·  Investors to benefit from incremental value generated from such corporate actions
·  To invest 80 per cent of proceeds in equity and the remaining 20 per cent in debt