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Alliance Frontline Raised Rs.110 Crore

In a not so cheerful market, Alliance Frontline Equity Fund has raised Rs. 110 crore in its initial offer - the highest mop-up by any equity fund in two years.

As investors belief in equities undergoes a patience test, the new diversified edition from Alliance -- Alliance Frontline has raised Rs 110 crore. It opened for initial subscription from August 12 to August 30, 2002. Alliance Frontline will combine the stock picking skills of its fund manager and will be consistently diversified. The fund's sector spread will be realigned to that of BSE 200 every month.

This is the highest initial mobilisation by any equity fund in the past two years. Before this, the most successful fund IPO was of HDFC Growth Fund which Rs 135 crore in August 2000.

In a shaky market since August 2000, 24 new equity funds have been launched. Of these, 14 have been in 2002 including 6 index funds. Most offerings during the period raised a small amount too get started. The only prominent fund IPO FT India PE Ratio Fund (erstwhile, Pioneer ITI PE Ratio Fund) which raised Rs 48 crore in February 2002, for its novelty than a compelling investment case. Infact, PE Ratio Fund is not an all equity fund. It is a dynamic asset allocation fund whose asset allocation changes with the P/E multiple of the market.

Robust performance of its older funds – the Alliance '95 and Alliance Equity has been the lure. Alliance '95, a balanced fund has given a 23% return since its launch in February 1995 while Alliance Equity has posted a 26% gain since launch in August 1998.