The National Investment and Infrastructure Fund (NIIF) of India has received funding commitment of up to $1 billion (Rs 7,066 crore at current exchange rates) each from an Australian and a Canadian pension fund.
AustralianSuper, the nation’s largest superannuation fund, and Ontario Teachers’ Pension Plan of Canada have each signed agreements to invest in the NIIF Master Fund.
NIIF said in a statement on Tuesday that the agreements include commitments of $250 million each in the Master Fund and co-investment rights of up to $750 million each in future opportunities alongside the fund.
This marks the third close of the NIIF Master Fund. AustralianSuper and Ontario Teachers’ will join the government of India, Abu Dhabi Investment Authority (ADIA), Temasek, HDFC Group, ICICI Bank, Kotak Mahindra Life Insurance and Axis Bank as investors in the fund.
ADIA, the sovereign wealth fund of Abu Dhabi, had committed to invest $1 billion in the NIIF fund in 2017 while Singapore state investment firm Temasek had pledged $400 million in 2018.
AustralianSuper and Ontario Teachers’ will also become shareholders in NIIF Ltd, the investment management company.
Sujoy Bose, managing director and CEO at NIIF, said the fresh investments show the international interest in the Indian infrastructure sector and reconfirms the many strengths of NIIF.
Ben Chan, regional managing director of Asia Pacific at Ontario Teachers’, said the commitment to NIIF will substantially bolster the pension fund’s presence in India and provide it with “on-the-ground market insights and capabilities” to be well-positioned in a large market with significant expected growth.
The NIIF also said that domestic investors HDFC Life Insurance Co. and Kotak Mahindra Life Insurance have committed an additional Rs 60 crore in the third round.
With the fresh commitments, the NIIF Master Fund has become the largest infrastructure fund in India with assets under management of more than $1.8 billion and a co-investment pool of $2.5 billion. This will enable the fund to invest at the scale required for the large infrastructure requirements in India, the NIIF said.
The fund invests in equity capital in core infrastructure sectors in India with a focus on transportation, energy and urban infrastructure.