Investment Objectives and Strategy
IIF aims to primarily invest equity for the long-term in companies that derive value from development and operation of infrastructure assets/projects in India. The resulting portfolio is expected to comprise greenfield, brownfield and operational assets/projects in core infrastructure sub-sectors including transport (toll roads, rail, ports, and airports), energy and utilities (power generation, renewables, pipelines, transmission, distribution and storage), telecommunications infrastructure and urban infrastructure.
The investment objectives of IIF are:
- To achieve attractive risk-adjusted returns over the long-term by investing in infrastructure in India.
- To seek investments in infrastructure that are expected to deliver strong, predictable and stable cash flows in the form of dividend distributions with low volatility of returns and potential for capital growth.
The Investment Strategy of IIF is summarised below:
Infrastructure Equity focus
- Investments structured primarily through equity shares.
- Clear definition of core infrastructure.
- Target assets have low cyclicality, high entry barriers, an inflation hedge and bear low correlation to other assets.
Attractive Risk and Return Equation
- Low to moderate risk arising from underlying long-term cash flows.
- Return through regular cash yield and capital appreciation.
Portfolio Diversification
- Single asset 10% of Fund size.
- Investment across sub-sectors with appropriate sectoral caps.
- Investment across greenfield, brownfield and operational projects.
Active Management and Governance through Investment rights
- Actively manage assets with the objective of delivering operational and financial efficiency enhancements.
- Significant minority positions with strong governance rights.
(e.g. proportionate board representation, affirmative and negative voting rights and regular information requirements.) - Optimisation of financial structures for enhancing returns.
Long-term Investment Horizon
- Individual investments expected to be held for the long-term.
- Alignment with sponsor interest.
- Exits at fund manager discretion - based on the circumstances and investor interests.
