NIIF to make a $700-million first closure of $1 billion Private Markets Fund II

The National Investment and Infrastructure Fund ( NIIF), a quasi-sovereign investment manager backed by the Centre, is set to complete a $700-million first closure of its latest Private Markets Fund (PMF II) within the next couple of months, according to sources familiar with the development.

This initial close marks a significant increase compared with the debut fund, PMF I, which raised $600 million in 2019.

This week, the New Development Bank (NDB), a Shanghai-based multilateral development bank established by the BRICS nations—Brazil, Russia, India, China, and South Africa—committed $100 million to PMF II. The Asian Infrastructure Investment Bank (AIIB), which had backed PMF I, also reaffirmed its support with a $125 million commitment in May.

The government will remain the single largest investor in PMF II, contributing 49% of the total capital.

ET first reported in April last year about the launch of $1-billion PMF II.

The Private Markets Fund is dedicated to supporting India-focused private equity and venture capital funds. With a target size of $1 billion, PMF II aims to invest across key growth sectors, including electric vehicle (EV) infrastructure, waste management, urban and social infrastructure, technology, manufacturing, and their associated supply chains.

Mirroring the structure of PMF I, PMF II plans to build a diversified portfolio comprising approximately 15 funds as well as direct investments in companies. About 75% of the fund’s capital will be allocated to growth and venture capital funds, with the remaining 25% invested directly into Indian enterprises, added sources.

Since its inception, PMF I has deployed $600 million across 60 companies through nine portfolio funds. It has backed notable funds such as Multiples PE (owned by Renuka Ramnath), Lighthouse India, Invascent, Eversource Capital, Somerset Healthcare, Arpwood Partners, Yournest Capital Advisors, HDFC Capital Advisors, and Amicus Capital Partners.

Last year, GoI had appointed Sanjiv Aggarwal as Chief Executive Officer & Managing Director. Agarwal, a former Partner at UK's infrastructure fund Actis, replaced Sujoy Bose, first managing director & chief executive officer of NIIF.

The Private Markets Fund is headed by managing partner Anand Unnikrishnan, who joined NIIF in 2018. Prior to joining NIIF, Anand was a senior member of Macquarie Infrastructure and Real Assets (MIRA) team in India for about 10 years.

When contacted, an NIIF spokesperson declined to comment.

Overall, NIIF manages over $4.9 billion in equity commitments across four distinct funds: the Master Fund (infrastructure), Private Markets Fund (fund of funds), Strategic Opportunities Fund (growth equity), and India-Japan Fund.

NIIF is also launching its Master Fund II in a couple of months, targeting a commitment of about $4 billion.

NIIF’s investor base comprises a diverse group of sovereign wealth funds, pension funds, multilateral development banks, and government counterparts. Prominent backers include the Abu Dhabi Investment Authority (ADIA), Singapore’s Temasek, Australian Super, Ontario Teachers’ Pension Plan, Canada Pension Plan Investment Board (CPPIB), Asian Infrastructure Investment Bank (AIIB), Asian Development Bank (ADB), New Development Bank (NDB), and the Japan Bank for International Cooperation (JBIC).