UNIFI Capital unveils open-ended fund

“Through this fund we expect to raise an additional Rs 200 crore. While the fund would be an open-ended scheme,UNIFI plans to keep an investment perspective of 18-24 months”,UNIFI Capital CMD Sarath Reddy told reporters here.

He said that during 2005-2010,Spin-offs has generated higher returns of 16 per cent on an average,in comparison to the BSE 500 index during the same period of time.

He said Spin-offs were triggered by corporate restructuring as they were seeing a growing interest among listed companies in using Spin-offs to unlock value.

According to UNIFI Capital Vice-President (Product Development and Relationship Management)G Maran,Spin-offs occur when a parent company distributes most of its holdings of stock in a subsidiary to the parent’s shareholders. As a result,the subsidiary company is no longer owned by the parent company.

The market valuation of a combine company would be lower as separate companies and the valuation gap is called conglomerate discount.

Spin-Offs help remove such discounts and improve shareholder return,he said.

Spin-off are particularly effective in increasing shareholder value because the parent company can focus on its operations.

UNIFI manages funds for several high-net worth individuals,corporate heads and to entrepreneurs. The company presently operates in Chennai,Bangalore,Hyderabad,Mauritius and in the UAE.