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| Strategic Investment Funds
The Master Fund is anticipated to have total commitments of just over US$2.1 billion, of which US$1 billion (or 49 percent) would come from the government (table 12.1). At the time of this report, the Master Fund had received commitments of approximately US$900 million from commercial investors, resulting in a total of approximately US$1.8 billion including the government’s contribution. The largest investors, providing a commitment of US$250 million each, are the Abu Dhabi Investment Authority (ADIA), one of the largest sovereign wealth funds globally; AustralianSuper, Australia’s largest superannuation fund; and the Ontario Teachers’ Pension Plan (Ontario Teachers), Canada’s largest single-profession pension plan (PTI 2019). Temasek, Singapore’s sovereign wealth fund, committed US$100 million. Four prominent domestic financial institutions— Axis Bank, HDFC Group, ICICI Bank, and Kotak Mahindra Life Insurance— have also invested in the Master Fund (NIIF 2018a). Investors committing to the Master Fund receive proportional ownership rights in NIIF Limited, the manager, and 3:1 co-investment rights with the Master Fund. For instance, ADIA, AustralianSuper, and Ontario Teachers secured co-investment rights of US$750 million each, and Temasek secured rights of US$300 million. Such rights provide ADIA, AustralianSuper, Ontario Teachers, and Temasek the ability to co-invest with the Master Fund in individual deals if they wish to do so. See further details on the co-investment strategy in the subsection on the Master Fund strategy. The Fund of Funds is anticipated to have total commitments of US$1 billion, including the government’s stake. In June 2018, the board of the Asian Infrastructure Investment Bank (AIIB) approved a US$100 million investment in the NIIF Fund of Funds (AIIB 2018).3 As part of AIIB’s proposed investment, NIIF has implemented ESG standards throughout its operations and, in all three funds, has recruited an ESG officer to ensure implementation.4 The government’s role as anchor investor of the NIIF funds was a key determinant of the decisions by ADIA, AIIB, AustralianSuper, Ontario Teachers, and Temasek to consider investing in NIIF funds. The presence of prominent private Indian financial institutions as investors was regarded as an additional strength. Discussions with ADIA started in the context of a broad memorandum of understanding between the Indian and Emirati governments. AIIB, as a multilateral
TABLE 12.1
NIIF’s anticipated fund size and investors at time of writing FUND OF FUNDS
MASTER FUND
STRATEGIC OPPORTUNITIES FUND
Government maximum commitment (US$, billions)
0.5
1.0
1.5
Total anticipated fund size (US$, billions)a
Just over 1.0
Just over 2.0
Just over 3.0
Investors at the time of writing (excluding government)
AIIB (US$100 million, potentially increasing to US$200 million)
ADIA (US$250 million); AustralianSuper (US$250 million); Ontario Teachers (US$250 million); Temasek (US$100 million); four domestic financial institutionsb
None
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. If NIIF succeeds in attracting commercial investors matching (with a 51 percent stake) the government’s maximum capital commitment. b. Canada Pension Plan Investment Board, Canada’s Public Sector Pension Investment Board, and the US International Development Finance Corporation have also invested since the case study was written.
