The National Investment and Infrastructure Fund (NIIFL) on February 11 announced a commitment of $100 million from the New Development Bank (NDB) into the NIIF Fund of Funds (FoF) taking the FoF's secured funding commitments to $800 million.
With this, the NDB joins the Government of India (GoI), Asian Infrastructure Investment Bank (AIIB) and Asian Development Bank (ADB) as an investor in the FoF. It also marks the bank's first equity investment in India and its first investment ever in a FoF.
Sujoy Bose, MD & CEO of NIIF stated that the Indian economy is “well on the path to recovery from COVID-19 induced slowdown,” and India’s PE sector is expected to be a major provider of capital for the continued long-term growth of businesses.
“The FoF provides global institutional investors with an opportunity to build a diversified portfolio of growth investments through experienced Indian fund managers. NDB’s commitment to the FoF demonstrates the confidence of global investors in NIIF’s goal of delivering returns while ensuring international standards of Environmental, Social and Governance (ESG) practices,” Bose added.
The investment, the NDB said is aimed at supporting private capital investments in India at a time “when Indian companies are seeking much-needed equity to achieve their long-term growth.”
“This investment also supports NDB and NIIF’s common goal of investing responsibly into number of sectors that support India’s growth and economy,” a statement read.
Xian Zhu, VP and COO of NDB noted that the investment will provide India’s private sector with additional funds during the time of crisis and will allow the bank to “access to a diversified range of portfolio funds and support the Indian government’s effort to promote investment in infrastructure.”
The NIIF FoF was established in 2018 to provide homegrown Indian private equity (PE) fund managers who demonstrate strong track record on delivering returns to investors, with access to an India-focused institutional investor that operates at scale.
It also provides foreign institutional investors (FIIs) an opportunity to build a portfolio of growth-focused funds and selectively co-invest into a wide range of options.
The FoF has till date committed Rs 2,750 crore (~ $370 million) to four funds, each focused on green energy and climate; middle-income and affordable housing; entrepreneur-driven mid-market growth companies; and affordable healthcare. Manager of these funds have raised over $1.1 billion equivalent alongside NIIF’s commitments.
NIIFL is a collaborative investment platform for domestic and foreign investors, anchored by GoI. IT manages $4.5 billion of equity capital commitments across its three funds – Master Fund, Fund of Funds and Strategic Opportunities Fund.