BRICS’ NDB pledges $100  million to NIIF’s Fund of Funds

Mumbai: New Development Bank (NDB), earlier known as the BRICS Development Bank, has committed $100 million to India’s National Investment and Infrastructure Fund’s (NIIF) Fund of Funds, two people aware of the development said.

NDB is a multilateral development bank that was created by governments to leverage capital for development purposes, especially infrastructure projects. Founded by Brazil, Russia, India, China and South Africa (collectively the BRICS countries) in July 2014, the bank was launched a year later with an initial authorized capital of $100 billion.

Earlier in August, NIIF Fund of Funds (FoF) received a commitment of ₹667 crore (close to $100 million) from the Asian Development Bank (ADB), according to a disclosure on ADB’s website.

NIIF’s Fund of Funds, according to the disclosure, is looking to raise about $1 billion to invest in up to 10 private equity funds managed by fund managers in India. Its portfolio funds are expected to provide primarily growth capital to firms across sectors, including green infrastructure, affordable housing, manufacturing and services.

“Of the targeted corpus, the fund has so far received commitments worth $700 million, including investments from NDB and ADB,” one of the people cited above said.

In June 2018, Asian Infrastructure Investment Bank (AIIB) had approved an equity investment of $100 million as part of FoF’s initial closing, committing a further investment of $100 million as part of phase II for the final closing.

Emails sent to NIIF and NDB remained unanswered till press time.

Envisioned in the Union budget 2015, NIIF was launched as an alternative investment fund in December 2016 with a target corpus of ₹40,000 crore.

Its investments are diversified across its three funds— Master Fund, Fund Of Funds and Strategic Fund, across which it manages $4 billion of capital commitments.

In 2017, Abu Dhabi’s sovereign wealth fund—Abu Dhabi Investment Authority—committed to invest $1 billion, becoming the first institutional investor in NIIF’s Master Fund and a shareholder in NIIF Ltd, its investment management firm.

NIIF is a quasi-sovereign wealth fund, in which the government of India holds 49% equity with the rest held by foreign and domestic investors, is mandated to invest in infrastructure and related sectors that could help fuel economic growth in the country.

Its Fund of Funds is mandated to invest as an anchor investor in third party fund managers. It can also selectively form joint ventures with fund managers.