Strategic Investment Fund Under NIIF
Why in News?
- Finance Ministry is planning to set up a fund under the National Investment and Infrastructure Fund (NIIF) dedicated for strategic investments.
- As on date, three funds have been established by the Government under the NIIF platform and registered with SEBI
Three funds are
- Category II Alternative Investment Funds and National Investment and Infrastructure Fund II (‘Strategic Fund’)
- National Investment and Infrastructure Fund (or Master Fund)
- NIIF Fund of Funds – I.
Strategic Fund:
- The objective of National Investment and Infrastructure Fund II (‘Strategic Fund’) is to invest largely in equity and equity-linked instruments.
- The Strategic Fund will focus on green field and brown field investments in the core infrastructure sectors.
- It will focus on green field and brown field investments in the core infrastructure sectors
National Investment and Infrastructure Fund (NIIF):
- Proposed in Union Budget 2015, National Investment and Infrastructure Fund (NIIF) has been set up in last month of 2015.
- The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
- The Fund aims to attract investment from both domestic and international sources.
- The objective of NIIF is to maximize economic impact mainly through infrastructure development in commercially viable projects, both greenfield and brownfield, including stalled projects, NIIF would solicit equity participation from strategic anchor partners.
- NIIF has been structured as a fund of funds and set up as Category II Alternate Investment Fund (AIF) under the Securities and Exchange Board of India (SEBI) Regulations.
- It is a Rs. 40000 crore fund to provide long term capital for infrastructure projects.
- The government’s contribution would be limited to 49% of the subscribed capital.
- The government will seek participation from strategic investors such as sovereign fund, quasi sovereign funds and multilateral or bilateral investors, which can help leverage this fund to many times.
- Cash-rich PSUs, pension funds, provident funds, National Small Saving Fund will be able to pick up stake in the fund.