The National Investment and Infrastructure Fund has entered into a collaboration with Japan Bank for International Cooperation (JBIC) to launch a $600 million India-Japan Fund. The setting up of the India-Japan Fund represents a key milestone in the strategic and economic partnership between the government of India and Japanese government. The fund will have JBIC and the government of India as anchor investors.
The India-Japan Fund will actively invest in India’s environmental preservation sector, including renewable energy, e-mobility businesses, and circular economy sectors such as waste management, and water.
The announcement marks NIIF’s first bilateral fund, with government of India contributing 49 per cent of the target corpus and the remaining 51 per cent contributed by JBIC.
The fund will be managed by NIIF Limited (NIIFL), and JBIC IG (a subsidiary of JBIC) will support NIIFL in promoting Japanese investments in India.
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, healthcare, education among others.
