Gandhinagar : Gujarat govt has proposed setting up an umbrella asset management company to consolidate its risk capital investments and channel equity and other forms of funding into startups and emerging technology sectors, including semiconductors and climate technology. The exercise will also involve the restructuring of Gujarat Venture Finance Ltd (GVFL).
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Majority stake will be held by govt, and remaining equity will be held by financial institutions and strategic investors,” said a source close to the development. “Flexible funds architecture would enable establishment of sector-specific and instrument-specific funds through appropriate structures, including SEBI registered AIFs,” said an official connected with the project. “GVFL will be restructured as part of the exercise and will be positioned as the umbrella asset management company under the finance department. “Apart from bringing the state’s risk capital initiatives under a common governance framework, the proposal aims to infuse professional investment management, mobilise private capital and build a long-term sustainable platform for supporting innovation, entrepreneurship and emerging sectors. Asset management companies are specialised firms that manage investments and financial assets on behalf of individuals, institutions or govts to generate returns and maximise value. Their functions include identifying investment opportunities, allocating funds across sectors, assessing financial risks, monitoring performance and ensuring regulatory compliance. They may invest in equities, bonds, infrastructure, startups and emerging technologies, depending on their mandate. The govt-backed entities can play a strategic role by managing public investments professionally, providing equity and other funding to businesses, and supporting sectors with high growth potential. They can also attract private capital, improve investment efficiency and strengthen long-term economic development. Download the TOI App.
The proposed entity is expected to bring the state’s risk capital initiatives under a common governance framework, with professional management and separate investment teams evaluating funding proposals. The proposed company will have a professional management team handling finance, risk management, legal affairs, accounting, human resources and company secretarial services. Separate investment teams and independent investment committees will be established for individual funds to conduct due diligence and assess investment proposals.