UTI Credit Risk Fund and UTI Medium Term Fund have received the entire payment along with interest from Zee Learn Limited on July 14, 2020.
The fund house had enabled side pocketing in these two schemes on July 07, 2020 after the securities of Zee Learn were downgraded to below investment grade.
Side-pocketing is a practice in which fund houses can segregate risky assets from the rest of the holdings and cap redemptions. Simply put, fund houses can create two funds in an existing fund - one with risky assets where the fund house will not allow redemption expecting recovery from stressed assets and another fund with other assets with existing features. Investors redeeming their units in main portfolios get redemption proceeds based on the NAV of main portfolios and continue to hold the units of segregated portfolios.
The fund house said that it will soon credit the recovery proceeds to its unit holders.
"The recovery proceeds, in proportion to investors’ unit holdings, will be credited to investors’ Core Banking Solution (CBS) bank account, if registered in the portfolio, and in the absence of CBS bank account details, the physical warrant will be dispatched once postal / courier services become operational," the fund house noted in a press release.
