• Union Finance Minister Nirmala Sitharaman chaired the 5th meeting of the governing council of National Investment and Infrastructure Fund (NIIF).

• NIIF, India’s quasi-sovereign wealth fund, has developed into an internationally credible and commercially viable investment platform, backed by several highly respected global and domestic investors who have invested alongside the government of India in NIIF Funds.

• Two infrastructure non-banking financial companies (NBFCs), where NIIF has majority stakes, have increased their combined loan book from Rs 4,200 crore to Rs 26,000 crore in three years without experiencing any non-performing loans (NPLs) till date.

• Sitharaman has asked NIIF to explore opportunities under the National Infrastructure Pipeline (NIP), PM GatiShakti and National Infrastructure Corridor, which include a big pool of investible greenfield and brownfield investment projects.

• NIIF’s first bilateral fund — an ‘India Japan Fund’ — with contribution from the government has been proposed through an MoU between National Investment and Infrastructure Fund Limited (NIIFL) and Japan Bank for International Development (JBIC).

• The MoU was signed recently on November 9, and this key update regarding bilateral engagements of NIIF was endorsed by the governing council.

National Investment and Infrastructure Fund (NIIF)

• In the Union Budget 2015-16, the government announced the creation of the National Investment and Infrastructure Fund (NIIF).

• Since infrastructure investments require long-term, patient capital, the government of India anchored the establishment of the NIIF, a fund manager that manages investments in infrastructure and related sectors in India. 

• NIIF is a collaborative investment platform for international and Indian investors which manages funds with investments in different asset classes and diversified sectors that generate attractive risk-adjusted returns. 

• NIIF manages over $4.3 billion of equity capital commitments across its three funds — Master Fund, Fund of Funds, and Strategic Opportunities Fund — each with a distinct investment strategy committed to support the country’s growth needs.

i) NIIF Master Fund (NIIF MF) is the largest India-focused infrastructure fund. The Fund primarily invests in operating assets in core infrastructure sectors, such as transportation and energy, through its portfolio companies. In order to construct the right portfolio from a risk-reward standpoint, the fund would invest in a mix of operating as well as greenfield opportunities. 

ii) NIIF Fund of Funds (NIIF FoF) is one of the largest India-dedicated Fund of Funds. It is focused on building a portfolio of funds across investment strategies and in diversified sectors such as green energy, affordable and mid-income housing, health care, social infrastructure, technology, consumer, and financial services. It has received commitments from multilateral institutions like Asian Infrastructure Investment Investment Bank (AIIB), Asian Development Bank (ADB) and New Development Bank (NDB), making it the largest India-dedicated Fund of Fund globally.

iii) NIIF Strategic Opportunities Fund (SOF) is one of the largest India-focused growth equity funds. It has been established to invest largely in equity and equity-linked instruments. The fund’s strategy is to build a portfolio of large entrepreneur-led or professionally managed domestic champions and unicorns. It is aimed at investing in growth and development stage investments in companies and sectors that are strategically important to the Indian economy and are likely to benefit from India’s growth trajectory over the medium to long term. The sectors of initial focus are financial services, food and agriculture, health care, education among others.

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