India is exploring the possibility of setting up a London-listed ‘feeder fund’ for Infrastructure Debt Funds (IDFs), and is looking to work with the U.K. on increasing institutional investments in the sector, said Finance Minister P. Chidambaram.
“Both countries agreed to pursue joint work on the common aim of exploring ways to encourage increased institutional investment in infrastructure,” Mr. Chidambaram said in a joint statement issued with his British counterpart, George Osborne.
“This will include exploring the possibility of establishment of a London-listed ‘feeder fund’ for Indian Infrastructure Debt Funds (IDFs),” he said after the 6th annual India-U.K. Economic and Financial Dialogue that ended here on Thursday.
A feeder fund makes most of its investments through a ‘master fund’. It can obtain better trading and operating costs through the master-feeder structure because of economies of scale. Besides infrastructure, Mr. Chidambaram’s meeting with Mr. Osborne focussed on a range of issues, including financial sector reforms, the importance of increasing foreign direct investment (FDI) in Indian insurance sector, and support for small and medium enterprises (SMEs) with plans to “work together to promote trade and investment between the SME sectors of the two countries”.
Mr. Chidambaram left for Paris on Friday as part of his three-nation tour, which concludes with talks in Qatar on Saturday. The next round of talks will be held in 2014 in New Delhi.
