national-investment-and-infrastructure-fund-niif

Why is it in the news ?

Canada Pension Plan Investment Board (CPPIB) , the largest pension fund of Canada has agreed to invest about $600 million in the NIIF.

 

NIIF

NIIF, a 40,000 crores fund, was set up in 2015 for funding commercially viable greenfield, brownfield and stalled infrastructure projects. 

Composition

  1. 49% by Indian Government
  2.  Rest is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc. 

Areas of Investment

  • Energy, transportation, housing, water, waste management and other infrastructure-related sectors in India. 

Funds in NIIF

NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI). 

  1. Master Fund: Infrastructure fund primarily investing in sectors such as roads, ports, airports, power etc.
  2. Fund of Funds: Managed by fund managers who have good track records in infrastructure and associated sectors in India. Some of the sectors of focus include Green Infrastructure, Mid-Income & Affordable Housing, Infrastructure services and allied sectors. 
  3. Strategic Investment Fund: Is registered as an Alternative Investment Fund II under SEBI in India. Its primary focus is on  greenfield and brown field investments in the core infrastructure sectors. 

About Alternative Investment Fund ( AIF)

  • It means any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.

What Is an Alternative Investment?

  • Conventional categories include stocks, bonds, and cash. 
  • Alternative Investment Fund comprises pooled investment funds which invest in venture capital, private equity, hedge funds, managed futures, etc. 
  • Most alternative investment assets are held by institutional investors or accredited, high-net-worth individuals because of their complex nature, lack of regulation, and degree of risk.
  • Alternative Investment Fund is described under Regulation 2(1)(b) of the Regulation Act, 2012 of Securities and Exchange Board of India (SEBI). 
  • Generally, high net worth individuals and institutions invest in Alternative Investment Funds as it requires a high investment amount, unlike Mutual Funds.