The fund, which is the firm's third private equity fund, will allocate money to selected companies involved in energy production - biodiesel, biofuel, biomass, wind and solar energy, as well as energy-related products like innovative energy-storage batteries.

The selected companies will be both energy producers and energy-equipment manufacturers. However, proportions will be weighed by business sector, business cycle and growth potential. Each company will receive Bt200 million to run its operations.

The firm expects that the first five years will be a period of business development, with the last five generating profitable incomes for both companies and investors.

"We plan to raise funds this month and register the energy fund next month. Then we expect to give the money to four or five companies a year to start their operations," said MFC president Pichit Akrathit.

MFC signed a memorandum of understanding with the World Bank last month. The World Bank will support those selected companies whose technology and research are related to carbon credits. MFC will discuss financial support from the World Bank later.

Pichit explained MFC would not only raise funds for these companies, but also co-manage and control risk management.

"We'll send our people to sit on the board of each selected company," he said. "We'll have to screen the companies carefully and design the risk management well. We expect these companies will become good to list in the stock market later. We also expect them to yield a satisfactory profit of about 15 per cent on average throughout the 10-year maturity of the fund."

This fund will be offered only to institutions. Pichit said that currently, many energy companies and financial institutions had expressed interest on investing in it. A private equity fund invests in non-listed companies. MFC earlier launched its Thailand Equity Fund; it later launched its Tsunami Recovery Fund, helping 20 companies affected by the catastrophe that struck southern Thailand on December 26, 2004.

MFC, the country's third-largest mutual-fund player, reported that last year, its assets under management in three businesses - mutual funds, private funds and provident funds - rose a total of 11.16 per cent to Bt203.32 billion. It plans to grow by 15 per cent each year and projects Bt400 billion in assets under management by 2010.

This year, it will launch two more private equity funds, two property funds, six foreign-investment funds, five structured-product funds and four equity funds, including a long-term equity fund.

It plans this year to have the Government Savings Bank (GSB) sell its products through its branches nationwide.

"GSB is one of MFC's major shareholders, and the bank sent a representative to join our board after it increased its stake in MFC last year. We're now working on the possibility of offering some principal guarantee products to GSB's customers," Pichit said.

Piyarat Setthasiriphaiboon

The Nation