Understanding National Infrastructure And Investment Funds: A Comprehensive Overview

The National Investment and Infrastructure Fund (NIIF) is India's first sovereign wealth fund, established by the Government of India in 2015. The fund aims to optimise the economic impact of infrastructure-related projects by investing in them. NIIF is a collaborative investment platform for international and Indian investors, providing long-term capital for projects in sectors such as transportation, energy, climate infrastructure, and affordable housing. As of 2024, NIIF has over USD 4.9 billion in assets under management across four funds: Master Fund, Private Markets Fund, Strategic Opportunities Fund, and India-Japan Fund. The Indian government holds a 49% share in the fund, with the remaining balance coming from global institutional investors and domestic financial institutions.

The National Investment and Infrastructure Fund (NIIF) is India's first sovereign wealth fund

NIIF has four funds under its management: the Master Fund, Private Markets, Strategic Opportunities Fund, and India-Japan Fund. These funds aim to raise capital from domestic and international institutional investors to support India's growth needs across critical sectors. The Master Fund, NIIF's largest fund, focuses on investing in well-established enterprises in the infrastructure space, while the Private Markets Fund targets funds managed by reputable fund managers. The Strategic Opportunities Fund provides long-term capital to strategic sectors, and the India-Japan Fund is a bilateral initiative with the Japan Bank for International Cooperation.

NIIF has successfully attracted prominent investors, including the Abu Dhabi Investment Authority, Temasek, domestic banks like ICICI Bank and HDFC Bank, and multilateral institutions like the Asian Infrastructure Investment Bank and the Asian Development Bank. As of April 2024, NIIFL has over USD 4.9 billion in assets under management, demonstrating its ability to catalyse capital and support India's infrastructure development.

NIIF manages four funds: Master Fund, Private Markets, Strategic Opportunities Fund and India-Japan Fund

The National Investment and Infrastructure Fund (NIIF) manages four funds: the Master Fund, Private Markets, Strategic Opportunities Fund, and India-Japan Fund. These funds were established to raise capital from domestic and international institutional investors to invest in India. Here is a more detailed overview of each fund:

Master Fund

The Master Fund is an infrastructure fund that primarily invests in operating assets within core infrastructure sectors such as roads, ports, airports, and power. It is one of the largest India-focused infrastructure funds and aims to participate in India's robust infrastructure story, projected to attract investments of USD 1.5 trillion over the next decade. The fund's strategy involves investing in high-quality businesses and assets across different core infrastructure sectors, including transportation, energy, digital, and urban sub-sectors. The Master Fund has a target fund size of USD 2.1 billion and achieved its final close in December 2020, securing USD 2.34 billion.

Private Markets Fund

Formerly known as the Fund of Funds, the Private Markets Fund is a USD 600 million fund that invests in other funds managed by experienced fund managers. It also acts as an anchor investor, allowing fund managers to attract additional capital from institutional investors. The Private Markets Fund has a diverse portfolio across various sectors, including climate, healthcare, affordable housing, technology-enabled businesses, and financial services. In February 2024, the fund committed USD 25 million to Amicus Capital's Fund II, marking the full utilisation of its aggregate capital commitments.

Strategic Opportunities Fund

The Strategic Opportunities Fund is one of the largest India-focused growth equity funds, providing long-term capital to strategic and high-growth sectors in India. It aims to build domestic leaders and drive value creation by leveraging the NIIF ecosystem and its network of shareholders and partners. The fund invests in sectors demonstrating intrinsic structural growth and excludes commoditised sectors, sectors lacking ESG orientation, and core infrastructure. The Strategic Opportunities Fund has made notable investments in companies such as Ather Energy, an electric two-wheeler manufacturer, and Manipal Hospitals, a leading hospital chain in India.

India-Japan Fund

The India-Japan Fund (IJF) is NIIF's first bilateral fund, established in partnership with the Japan Bank for International Cooperation (JBIC). The fund focuses on environmental preservation and seeks investment opportunities that align with low carbon emission strategies. It also promotes business collaboration between Japanese and Indian companies, helping Japanese companies establish a presence in India and facilitating strategic partnerships. The IJF has a target corpus of INR 49 billion (USD 600 million), with the Government of India and JBIC as anchor investors. In January 2024, the fund made its first investment of INR 400 crore in Mahindra Last Mile Mobility Limited.

NIIF was established to provide infrastructure investment to maximise the economic impact of commercially available projects

The National Investment and Infrastructure Fund (NIIF) was established by the Government of India in 2015 as the country's first sovereign wealth fund. The primary objective of the NIIF is to maximise the economic impact of commercially available projects by investing in infrastructure-related projects.

NIIF aims to catalyse capital into the country and support its growth needs across sectors of importance. It is a collaborative investment platform for international and Indian investors, providing long-term capital for infra-related projects. NIIF manages about USD 5 billion of equity capital commitments across four funds, each with its distinct investment strategy. These funds are the Master Fund, Private Markets Fund, Strategic Opportunities Fund, and India-Japan Fund.

The Master Fund, NIIF's largest infrastructure fund, focuses on core infrastructure and operating assets in sectors such as transportation and energy. It has commitments of over USD 1.8 billion, exceeding its target size of USD 2.1 billion. The Private Markets Fund invests in funds managed by third-party managers in dynamic sectors such as climate infrastructure, middle-income and affordable housing, and digital consumer platforms. The Strategic Opportunities Fund is a private equity fund that aims to build scalable businesses in sectors that are important to the country. Finally, the India-Japan Fund (IJF) is NIIF's first bilateral fund, investing in environmental preservation and enabling collaboration between Indian and Japanese companies.

NIIF's establishment has been instrumental in providing infrastructure investment to maximise the economic impact of commercially available projects, with a focus on long-term capital and collaboration between investors.

NIIF's investment philosophy is guided by a long-term horizon

The National Investment and Infrastructure Fund (NIIF) is India's first sovereign wealth fund, established by the Government of India in 2015. NIIF's investment philosophy is guided by a long-term horizon, aiming to optimise the economic impact by investing in infrastructure-related projects.

NIIF's long-term outlook is reflected in its investment strategy, which focuses on generating attractive risk-adjusted returns for its investors. The fund targets investments in successful businesses that are vital for India's future, fostering sustainable public-private collaboration. NIIF's leadership team has extensive experience across sectors and geographies, enabling them to identify opportunities that offer long-term growth potential.

The fund's commitment to long-term investing is evident in its approach to portfolio companies. NIIF seeks to invest in well-established enterprises with long-term agreements, operating in regulated environments with a strong track record. This strategy helps mitigate inflationary risks and ensures stable cash inflows. Additionally, NIIF adopts a sector-specific approach, partnering with prominent companies to establish diversified businesses.

NIIF's long-term horizon is further demonstrated by its focus on infrastructure and related sectors. The fund manages about USD 5 billion of capital commitments across four funds, each with distinct investment strategies. These funds include the Master Fund, Private Markets Fund, Strategic Opportunities Fund, and the India-Japan Fund. By investing in core infrastructure sectors such as transportation and energy, NIIF aims to capitalise on India's long-term economic growth trajectory.

NIIF's long-term perspective also aligns with its commitment to sustainable investing principles. The fund recognises that infrastructure development must be environmentally and socially responsible. This is reflected in NIIF's investments in renewable energy, electric mobility, waste management, and other sustainable initiatives.

In summary, NIIF's investment philosophy is characterised by a long-term vision, targeting investments that will drive India's economic growth and development. By adopting a long-term horizon, NIIF aims to create sustainable value for its investors while contributing to the country's infrastructure and economic progress.

NIIF is a collaborative investment platform for international and Indian investors

The National Investment and Infrastructure Fund (NIIF) is a collaborative investment platform for international and Indian investors. It was established by the Government of India in 2015 as the country's first sovereign wealth fund. NIIF is a fund manager that invests in infrastructure and related sectors in India. The fund aims to catalyse capital into the country and support its growth needs across sectors of importance.

NIIF is majority-owned by institutional investors and professionally managed by a team with experience in investments and infrastructure. The fund benefits from its association with the Government of India, which has a 49% stake across all NIIF funds, but maintains independence in its investment decisions. NIIF manages about USD 5 billion of capital commitments across four funds, each with its distinct investment strategy. These funds are:

• NIIF Master Fund: The Master Fund is the largest infrastructure fund in India, with commitments of over USD 1.8 billion and a target size of USD 2.1 billion. It focuses on core infrastructure and operating assets in sectors such as transportation and energy.
• NIIF Private Markets Fund: This fund invests in funds managed by third-party managers in infrastructure and associated sectors. It has commitments of USD 600 million and a target size of USD 1 billion.
• NIIF Strategic Opportunities Fund: The Strategic Opportunities Fund invests in and develops large-scale businesses and greenfield projects that are of strategic importance to India. It has a target size of USD 3 billion.
• India-Japan Fund: NIIF's first bilateral fund, the India-Japan Fund (IJF), invests in environmental preservation in India and seeks to enable collaboration opportunities between Indian and Japanese companies. The fund has a target corpus of USD 600 million, with the Government of India contributing 49% and the remaining 51% contributed by the Japan Bank for International Cooperation.

NIIF's investors include international institutions such as the Abu Dhabi Investment Authority (ADIA), Temasek, Ontario Teachers, and Australian Super, as well as multilateral institutions like the Asian Infrastructure Investment Bank, the Asian Development Bank, and the New Development Bank. Domestic financial institutions such as HDFC, Kotak Mahindra Bank, Axis Bank, and ICICI Bank are also among its investors.

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