OTPP, AustralianSuper to invest up to $2bn in India’s NIIF

The commitments from the Canadian pension and Australian superannuation fund bring NIIF’s Master Fund to its third close on more than $1.8bn.

Australia’s largest superannuation fund, AustralianSuper, and Toronto-based Ontario Teachers’ Pension Plan have agreed to invest with the National Infrastructure Investment Fund, a vehicle backed by the Indian government.

The two institutional investors will each commit $250 million to NIIF’s Master Fund and under the terms of the agreement will also have the right to co-invest up to $750 million each alongside the vehicle in the future, NIIF said in a statement.

The commitments mark the third close of the Master Fund on over $1.8 billion, the fund manager said, without providing more details.

The vehicle, which targets investments in India’s core infrastructure through the creation of sector-specific platforms focusing on transport, energy and urban infrastructure, had an initial target of $2 billion. According to an NIIF spokesperson, the target has been raised slightly to $2.1 billion.

This is the first time both pension funds are investing in India’s infrastructure sector, according to their websites. AustralianSuper and OTPP declined to comment.

“With this, NIIF Master Fund becomes the largest infrastructure fund in India with assets under management of over $1.8 billion and a co-investment pool of $2.5 billion, which will enable the Fund to invest at the scale required for the large infrastructure requirements in India,” NIIF said in its statement.

In addition to investing in NIIF’s Master Fund, OTPP and AustralianSuper will also become shareholders in NIIF’s management company, National Investment and Infrastructure Fund Limited (NIIFL), in which the Indian government owns 49 percent. However, NIIF did not specify the ownership interest each LP would be acquiring in the company.

NIIF has already established two sector-specific platforms. In April, it partnered with Roadis, a highway operator owned by Canada’s PSP Investments while in January 2018, it launched Hindustan Infralog, a joint venture with Dubai port operator DP World to invest in the logistics sector.

Other investors in the Master Fund include HDFC Life and Kotak Mahindra Life Insurance, which have each committed 300 million rupees during the latest round of fundraising, according to NIIF, as well as  the Abu Dhabi Investment Authority, ICICI Bank, Axis Bank and Singapore’s Temasek. ADIA, specifically, committed $1 billion to the vehicle in 2017.

The Indian government announced the creation of the NIIF at the end of 2015, with the mandate to attract private capital to fill the country’s infrastructure gap. New Delhi injected $3 billion in the fund manager, and tasked NIIFL with raising an additional $3 billion for the Master Fund and for the two other vehicles NIIF manages: the Strategic Investment Fund and the Fund of Funds. NIIFL’s assets under management across all three funds totals more than $4 billion.