BRICS bank commits $100m to India state-backed fund-of-funds
NIIF Fund of Funds, a rupee-denominated fund-of-funds vehicle anchored by the Indian government, has reached the $800 million mark following a $100 million commitment from the country’s New Development Bank (NDB).
NDB – formerly referred to as the BRICS Development Bank – is a multilateral development bank established in 2014 by Brazil, Russia, India, China, and South Africa. It is headquartered in Shanghai and has authorized capital of $100 billion. This is the bank’s debut equity investment in India and its first commitment to a fund-of-funds.
NIIF Fund of Funds, which is managed by National Investment & Infrastructure Fund (NIIFL), has already received $100 million from the Asian Development Bank, $200 million from the Asian Infrastructure Investment Bank (AIIB), and an unspecified amount from the Indian government. The overall target is $1 billion.
The objective of the fund-of-funds is to give homegrown private equity fund managers – with proven track records – access to an India-focused institutional investor that operates at scale. At the same time, it provides an opportunity for global institutional investors to build a portfolio of growth-focused funds in India and make selective co-investments. Areas of interest include green energy, social infrastructure, affordable housing, consumer services, financial services, and technology.
The fund-of-funds has made four commitments to date aggregating more than INR27.5 billion ($378 million). It has made allocations of GBP120 million ($167 million) to Green Growth Equity Fund (GGEF), which is managed by EverSource Capital; INR6.6 billion to an affordable housing vehicle launched by HDFC Capital; INR8.78 billion to Multiples Alternate Asset Management’s latest flagship fund; and INR1.25 billion to a healthcare vehicle managed by Somerset Indus Capital Partners.
The managers of these funds have raised more than $1.1 billion alongside NIIF’s commitments.
“The COVID-19 pandemic has had a deep impact on the Indian economy. NDB’s investment in the NIIF Fund of Funds will provide additional funds to Indian private sector businesses facing difficulties during this time of crisis. The partnership with NIIF allows NDB to access to a diversified range of portfolio funds and support the Government of India’s on-going effort to promote investment in infrastructure,” said Xian Zhu, a vice president and COO at NDB, in a statement.
NIIFL now has more than $4.5 billion of committed equity capital across three vehicles: the NIIF Master Fund, NIIF Fund of Funds, and Strategic Opportunities Fund.
NIIF Master Fund, which focuses on operating assets in core infrastructure sectors, achieved a final close of $2.34 billion last December. Foreign LPs – which can deploy an additional $3 billion in co-investment – include Canada’s Public Sector Pension Investment Board, the US International Development Finance Corporation, Canada Pension Plan Investment Board, AustralianSuper, Ontario Teachers’ Pension Plan, Abu Dhabi Investment Authority, and Temasek Holdings.
The Strategic Opportunities Fund is a private equity vehicle that aims to build scalable businesses across a range of opportunity long but capital short sectors.
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