Recently, the insurance regulator IRDAI allowed the insurance companies to invest in fund of funds for domestic use. This will help create domestic pool of capital when India is currently heavily dependent on foreign funds.
“It is a victory for India, the total amount of money available with long term pools like pensions and insurances roughly in India is about 67 lakhs crore as per the recent estimates," said Gopal Srinivasan, CMD, TVS Capital Funds and Board member, IVCA.
He added that if 5 percent of that is invested it is about Rs 3-4 lakh crore in to Alternative Investment Fund (AIF) I and II.
He further noted, “last April, the insurance regulator said that insurances can now invest into fund of funds. By opening up the insurance now to fund of funds many insurance companies will safely find gatekeepers like an NIIF, like a State Bank MSME funds hopefully many new fund of funds the government can set-up or the private sector can set-up through which they can access venture capital, access growth equity very safely.”