Temasek commits $400 mn to National Investment and Infrastructure Fund

Singapore state investment firm Temasek Holdings has committed to invest up to $400 million (Rs 2,750 crore) in the Master Fund of the National Investment and Infrastructure Fund (NIIF).

Sujoy Bose, managing director and CEO at NIIF, said Temasek’s commitment may include the potential co-investments with the government-anchored fund. Temasek’s investment has helped the Rs 14,000 crore Master Fund mark its second close, NIIF said.

Temasek joins Abu Dhabi Investment Authority (ADIA), HDFC Group, ICICI Bank, Kotak Mahindra Life Insurance and Axis Bank as an investor in the Master Fund and as a shareholder in National Investment & Infrastructure Ltd, NIIF’s investment management firm.

ADIA, the sovereign wealth fund of the Gulf emirate, had agreed to invest $1 billion in NIIF’s Master Fund in October last year. Indian financial institutions have contributed a total of about Rs 500 crore in the Master Fund.

The Indian government owns 49% of NIIF while domestic and international investors hold 51%. The government has committed around Rs 20,000 crore to the fund, or about half of the total target corpus.

The NIIF Master Fund will continue to raise capital so that it can invest at the scale required for infrastructure projects in India. The Master Fund invests in core infrastructure sectors with a focus on transportation, energy and urban infrastructure.

Besides the Master Fund, NIIF is also reaching out to investors for its Fund of Funds and Strategic Investment Fund. Earlier this year, Beijing-based Asian Infrastructure Investment Bank committed $200 million to NIIF to spend on roads, housing and urban development. The fund of funds is looking to raise around Rs 7,000 crore.

The fund of funds has, in turn, committed to make an anchor investment of £120 million in Green Growth Equity Fund. The India-focussed green energy fund will be managed by EverSource Capital, an equal joint venture between multi-asset investment firm Everstone Group and Lightsource BP.

At present, NIIF has about $3.5 billion of total committed capital across the three funds, said Bose.

Temasek, which had been doing just two to three deals in India in the past few years, has stepped on the gas in the country this year, with nearly half-a-dozen deals.

Temasek managed a portfolio of S$308 billion ($235 billion) as on 31 March 2018, with significant exposure to Singapore and the rest of Asia.