Singapore-based global investment firm Temasek has signed agreement to invest up to Rs 2,750 crore ($400 million) in National Investment and Infrastructure Fund’s (NIIF) Master Fund. With this investment, NIIF Master Fund is now one of largest infrastructure funds in India which invests in core infrastructure sectors in India with focus on energy, transportation and urban infrastructure.
As part of this agreement, Temasek will join Government of India (GoI), Abu Dhabi Investment Authority (ADIA), HDFC Group, ICICI Bank, Kotak Mahindra Life Insurance and Axis Bank as investor in NIIF’s Master Fund and as shareholder in National Investment and Infrastructure Limited (NIIFTL), investment management company of NIIF. With this agreement, NIIF now has agreements totalling almost Rs. 10,000 crore, with ADIA having committed to invest up to $1 billion (about Rs 6,500 crore) and domestic financial institutions, about Rs. 500 crore.
National Investment and Infrastructure Fund (NIIF)
NIIF was set up in December 2015 to catalyse funding into the country’s infrastructure sector by serving as quasi sovereign wealth fund (SWF). It has been set up as fund of funds structure with aim to generate risk adjusted returns for its investors alongside promoting infrastructure development. It aims to maximize economic growth of country mainly through infrastructure development in commercially viable projects (both greenfield and brownfield) and also in stalled projects.
NIIF has been registered with Securities and Exchange Board of India as a Category II Alternate Investment Fund. It has targeted corpus of Rs 40,000 crore to be raised over the years — 49% of it will be funded by government and remaining 51% will be raised from domestic and global investors, including international pension funds, sovereign wealth funds, multilateral/bilateral investors.
NIIF’s Governing Council is chaired by Finance Minister and act as an advisory council. Moreover, two companies viz. NIIFTL, a trustee of fund and NIIFL, an investment management company of NIIF were incorporated in 2015. NIIF is also planning third fund to be called strategic investment fund, which could be of similar size to its master fund. This third fund will target investments in greenfield projects and will be long-tenure fund of 15 years.