Sebi clears decks for private equity funds sponsoring MFs

The Securities and Exchange Board of India (Sebi) on Friday issued a framework allowing private equity funds to sponsor mutual funds. It also issued rules for self-sponsored asset management companies (AMCs).

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In the circular, Sebi said the applicant must have at least five years of experience in the capacity of fund manager, with experience of investing in the financial sector. Further, the applicant should have managed, committed and drawn-down capital of at least 5,000 crore.

However, Sebi added that the MF sponsored by the private equity fund would not participate as an anchor investor in the public issue of an investee company, where any of the schemes and funds managed by the sponsor PE has an investment of 10% or more or a board representation.