Public sector reinsurance company General Insurance Corporation in a bid to focus on its core business, is likely to offload its entire stake in mutual fund subsidiary GIC Asset Management Company, along with its four erstwhile subsidiaries to a private player.

"We might offload our entire stake in GIC Mutual Fund because this activity does not fall in line with our core activity," explained the chairman of GIC, P C Ghosh.

The board of directors of GIC recently discussed the possibility. Most of the directors on GIC Asset's board are also on the GIC board.

In addition, GIC Housing Finance, which holds 10.5 per cent in the fund arm, is cash strapped and wants to move out of a non-synergistic businesses.

The four insurance companies have no strategic interest in a mutual fund operation as they are hardcore insurers and want to remain so.

Ghosh, however, ruled out the possibility of merging the fund with either the State Bank of India or Life Insurance Corporation asset management entities.

"If we get a good offer from a private party or some other mutual fund we might sell it off. Nevertheless, we will not offload our stakes in the company until and unless we have sorted out the issue with the Soros group," he explained.

"We will not get a good response from the market until and unless we have settled the issue with the Soros group and we do not want to make a distress sale," Ghosh added.

"The public sector promoters wants to see the fund fall in good hands," he said.

GIC Mutual Fund is reeling under redemption pressure for its various closed -ended assured returns schemes and has recently asked for increasing the capital base of the fund which the promoters are considering.

GIC Mutual Fund on the other hand, is facing a problem as its US-based 40 per cent joint venture partner, SC Management, has informed that it will pull out of the business due to poor performance. SC Management has since then been more of a dormant equity holder in the company.

Sources close to the development said GIC and four subsidiaries were trying to take over the equity base of but there a lot of issues that needed to be addressed. The prime being the price at which the handover would take place.