NATIONAL INFRASTRUCTURE AND INVESTMENT FUND:
National Investment and Infrastructure Fund (NIIF) is India’s first sovereign wealth fund that was set up by the Government of India in February 2015.
The objective behind creating this fund was to maximize economic impact mainly through infrastructure investment in commercially viable projects, both Greenfield and Brownfield.
The Greenfield project means that a work which is not following a prior work. In infrastructure the projects on the unused lands where there is no need to remodel or demolish an existing structure are called Green Field Projects.
The projects which are modified or upgraded are called brownfield projects.
It was proposed to be established as an Alternative Investment Fund to provide long tenor capital for infrastructure projects with an inflow of Rs. 20,000 crore from the Government of India.
NIIF was approved in August 2015 by the Department of Economic Affairs. First meeting of its governing council was held in December 2015 further to which it was registered with SEBI as Category II Alternative Investment Fund.
SUJOY BOSE is the Managing Director & Chief Executive Officer of NIIF,
As of date, NIIF has registered three funds —
The NIIF Master fund will mainly look at investing in operational assets in the core infrastructure areas like roads, ports, airports and energy projects. Essentially the fund will be used to provide a boost for brown-field projects by matching domestic capital requirements with international investors.
Fund of Funds to primarily invest in infrastructure projects, affordable housing opportunities as well as renewable energy and other green businesses.
- The Fund of Funds is structured so as to pull money from domestic and international investors and channel the investments into sector specific funds that are managed by NIIF.
Strategic Investment Fund is aimed at financing development stage infrastructure projects and companies. These projects will require financing from the ground-up therefore involving large capital outlays and medium-to-long-term investment horizons.
Temasek Holdings, the Singapore based global investment firm, has agreed to invest up to $400 million or Rs 27.5 billion in the National Investment and Infrastructure Fund’s (NIIF) Master Fund.
Temasek is now the seventh investor in the NIIFs Master Fund, after the Government of India, Abu Dhabi Investment Authority (ADIA), HDFC Group, Kotak Mahindra Life Insurance, Axis Bank and ICICI Bank.
ALTERNATE INVESTMENT FUNDS:
In India, alternative investment funds (AIFs) are defined in Regulation of Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012.
It refers to any privately pooled investment fund, (whether from Indian or foreign sources), in the form of a trust or a company or a body corporate or a Limited Liability Partnership(LLP).
Hence, in India, AIFs are private funds which are otherwise not coming under the jurisdiction of any regulatory agency in India.
Types of AIFs
AIFs are categorized into the following three categories, based on their impact on the economy and the regulatory regime intended for them:
Category I AIF are those AIFs with positive spillover effects on the economy, for which certain incentives or concessions might be considered by SEBI or Government of India;
- Such funds generally invests in start-ups or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas which the government or regulators consider as socially or economically desirable.
- They cannot engage in any leverage except for meeting temporary funding requirements for not more than thirty days, on not more than four occasions in a year and not more than ten percent of the corpus.
- Venture Capital Funds, SME Funds, Social Venture Funds and Infrastructure Funds.
Category II AIF are those AIFs for which no specific incentives or concessions are given. They do not undertake leverage or borrowing other than to meet the permitted day to day operational requirements, as is specified for Category I AIFs.
- Private Equity or debt fund.
Category III AIF are funds that are considered to have some potential negative externalities in certain situations and which undertake leverage to a great extent; These funds trade with a view to make short term returns.
These funds are allowed to invest in CateogyI and II AIFsalso. They receive no specific incentives or concessions from the government or any other Regulator.
- Hedge Funds.