In a revamping exercise, General Insurance Corporation (GIC) — the national reinsurer — has decided to buy out the entire 21 per cent stake of the US-based Soros in GIC Mutual Fund (MF). GIC chairman D.Sengupta confirmed this and said that the reinsurer has offered to buy back the 21 per cent of Soros’ stake in GIC MF. ‘‘We have given Soros an exit option and it is up to them to respond,’’Sengupta said. According to him, GIC has has appointed an evaluator to find out the pricing of the Soros stake as well of other stake holders. Apart from Soros, the four erstwhile subsidiaries of GIC — New India Assurance, United India, National Insurance, Oriental Insurance and National Insurance — are the other shareholders of GIC MF. ‘‘The other insurance companies can also exit if they want to. We will be happy to own the entire MF,’’ said Sengupta, adding that globally, the asset management business fits in very well with reinsurance activities. However, it is not clear at present whether GIC would be keen to induct another strategic partner. GIC MF has gone through several changes in the last few years. Among the important ones is the induction of Soros as a partner. A ‘deemed sponsor’ under the Sebi norms, an infusion of funds by Soros was made through an issue of rights shares in 1997. Soros Fund Management came in as a stakeholder through SC Management Co Inc, US, a wholly-owned subsidiary. Soros had also placed two nominees on the GIC AMC board. Later, KPMG, the consultancy major, was roped in to advise on the MF’s restructuring. At the time of its formation in 1993, the fund was sponsored by GIC and its four subsidiaries with a paid-up capital of Rs 5 crore. Gradually, GIC MF made efforts to don a different look by restructuring — ranging from a restructuring of equity assets to launching fixed-income schemes. In the coming days, GIC MF would focus on fixed-income products — it has begun to re-work equity holdings — and will seek to get out of illiquid securities. It has launched two open-ended schemes — GIC Debt Fund and GIC Gilt Fund — last week. At the moment, a substantial portion of its equity investments are in four open-ended schemes. It also manages four close-ended schemes and special unit schemes for the sponsors. Apart from GIC D’Mat, the MF portfolio includes GIC Balanced, GIC Fortune‘94’and GIC Growth Plus II. GIC Growth Plus II was in the news recently because of its investment in Cyberspace — the stock which generated controversy because of the Unit Trust of India’s involvement in it.
