His departure, however, comes at a time when at least two to three of its key shareholders—high profile and strategic sovereign funds and long only investors—are unhappy and have expressed their displeasure in the way India’s quasi sovereign wealth fund is being run, the people mentioned above added.
NIIF, India’s quasi sovereign wealth fund, currently has $4.3 billion of assets under management through a Master Fund, a Fund of Funds and a Strategic Opportunities Fund.
Bose, a former Citi banker joined NIIF from Washington-based International Finance Corporation, the private sector lending arm of the World Bank, where he was the director and global co-head of infrastructure and natural resources.
A year after NIIF was conceived and announced in the Union Budget of 2015, for infrastructure financing, a search-cum-selection committee was constituted under the chairmanship of the then economic affairs secretary Shaktikanta Das for the selection of CEO of NIIF. Bose was cherry picked from that process.
It is registered with Sebi.
“Its been ongoing for a while now. His family is in Washington and two years he was stuck in India. Moreover, of late he (Bose) has been having issues with some of the members of the governing council members who have been nominated by the government,” said an official in the know.
Mails to Bose, spokesperson at the Ministry of Finance did not generate a response till press time.
Sources add the search is on to find a successor.
Over the years, NIIF has managed to pool in several top notch investors, both domestic and foreign—ranging from Abu Dhabi Investment Authority, Temasek, CPP Investment, Ontario Teachers Pension Fund, PSP Investments, Asian Infrastructure Development Bank, Australian Super, US International DSP, Kotak Mahindra, State Bank of India, HDFC Group and ICICI Bank among others as limited partners (LPs).
However, its performance has been patchy at best, say industry observers. Its portfolio includes a JV platform for logistics with DP World of Dubai, Ayana Renewables and Manipal Hospitals.
In Mrch 2019, it concluded its first control transaction through its Strategic Opportunities Fund vehicle, acquiring IDFC Infrastructure Finance Ltd, a NBFC-IDF (Infrastructure Debt Fund) and renamed it NIIF-IFL. Over the years, it has built multiple platforms for roads and infrastructure finance, among others.
In the past three years, the loan book of NIIF Infrastructure Finance has grown from Rs 4,000 crore to Rs 14,201 crore as on March 31, 2022, registering growth of 67% from a year earlier.
The loan book is well-diversified across renewable energy, transportation and logistics, power transmission and other infrastructure sectors. The growth in the loan book was largely driven by the solar renewable segment over the past few years, while the share of the road segment has gradually declined, said a recent ICRA report.
Such indifferent performance, plus the passive involvement of the government, with a minority 49% economic interest, along with the future course has peeved several high profile backers who have expressed their misgivings already. Some of these investors from North America and Middle East are key financial allies of the country with significant investments already on ground either as a limited partner to other funds or directly.
A consortium of NIIF-ADIA-PSP Investments, for example, was competing to buy into the Mumbai International Airport but lost out to Adani in a corporate coup. ADIA wrote several letters to the prime minister and the finance minister, which ET also reported, protesting against the way their proposal got rejected. The government did not want to get involved in what they called a commercial dispute between various corporate entities.
“The whole idea was to keep the government capped at 49% to stay out of the CVC audit and get best professional talent but it also turned out to be counter productive,” said an official who worked closely with the fund. “Unlike several other sovereign funds where the government’s funds are at stake, here the government was passive yet it played a key role in the governing council. Two senior finance ministry secretaries were members of the council and there is also board representation.”