Side-pocketing allows fund houses to separate bad assets from other liquid investments in a debt portfolio which may get impacted by the credit profile of the underlying instruments
Aditya Birla Sun Life Mutual Fund has segregated the exposure of Subhash Chandra-led Essel Group’s infra company in three schemes on November 25, the fund house said in a press release.
The decision to side-pocket the investment was taken after the company had failed to repay investors.
Side-pocketing allows fund houses to separate bad assets from other liquid investments in a debt portfolio which may get impacted by the credit profile of the underlying instruments.
The three schemes are--Aditya Birla Sun Life Medium Term Plan, Aditya Birla Sun Life Credit Risk Fund and Aditya Birla Sun Life Dynamic Bond Fund that had exposure to NCDs (non-convertible debentures) of Essel Group firm, Adilink Infra & Multitrading Private Ltd.
The three schemes have exposure of 7.5 percent, 3.7 percent and 5.6 percent to the NCD of Adilink Infra & Multitrading Pvt Ltd. In value terms, the exposures stood at Rs 419.04 crores, Rs 212.93 crores and Rs 160.70 crores which add up to Rs 792.67 crore.
On the other hand, ICICI Prudential Mutual Fund and HDFC Mutual Fund received payment from Essel Group for its investment in NCDs of Essel Group companies.
HDFC Mutual Fund received a total of Rs 167 crore while ICICI Prudential AMC received Rs 267 crore from the Group.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
