Insurers investing in Venture Capital
About Rs10,000 crore (US$2.26 billion) is expected to be invested by insurers in venture capital (VC) funds in the next six to eight months, in a bid to earn higher returns, reports the Economic Times.
Major insurers such as ICICI Prudential, Max New York Life, HDFC Life and Reliance Life Insurance are drawing up plans to place their surplus funds with venture capitalists, following recent changes made to investment norms by the Insurance Regulatory and Development Authority (IRDA).
“Investments by an insurance company into a VC fund makes complete sense because it’s a long-term investment. This will help the insurance firms to diversify their portfolio,” ICICI Prudential Life, Chief Investment Officer Puneet Nanda said.
IRDA recently allowed insurance firms to invest 3% of their total investible funds or 10% of the fund’s size, whichever is lower, into VC funds.
