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| Strategic Investment Funds
• NIIF Limited would be majority owned by nongovernment, commercially focused investors, with a board constituted with majority representation by nongovernment investors and independent directors. NIIF Limited would be able to recruit its staff and executives without government involvement. To fill a large equity financing gap for Indian infrastructure, NIIF aims to attract investors willing to consider large exposures and long tenors. By providing local access and expertise, NIIF aims to position itself as a beachhead for international capital looking to invest in Indian infrastructure through a collaborative investment approach. According to the NIIF CEO, the NIIF structure is partly inspired by the collaborative investment model (Monk, Sharma, and Sinclair 2017), whereby institutional investors join forces to establish collaborative platforms for cost-sharing on deal sourcing, due diligence, and other stages of the investment process. NIIF Master Fund investors are also shareholders in the investment manager, thereby leading to an investor-owned fund management platform.
FUND STRUCTURE NIIF Limited is the entity in charge of managing the three funds (figure 12.1). It was intentionally set up by the government as a company (not as a state- controlled development agency) to emphasize its role as a manager of commercial investments and the independence of investment decisions from policy objectives. Investors in the Master Fund receive an equity stake in NIIF Limited
FIGURE 12.1
NIIF structure Equity stake and board seats
Government
49%
NIIF Ltd.
Equity stake and board seatsa
ADIA
Manages all three funds
Australian Super
Master Fund
Ontario Teachers
Fund
Temasek
Fund investor
49%
49% Strategic Opportunities Fund
Fund of Funds
Domestic financial institutions
Others (to come)
AIIB
Others (to come)
Fund management company
Source: World Bank elaboration. Note: ADIA = Abu Dhabi Investment Authority; AIIB = Asian Infrastructure Investment Bank; NIIF = National Investment and Infrastructure Fund; Ontario Teachers = Ontario Teachers’ Pension Plan. a. Only for Master Fund investors. Allocation of board seat subject to contributing at least 10 percent of Master Fund capital.