Dutch development bank FMO has proposed a EUR15-million ($16 million) investment in North Haven India Infrastructure Fund (NHIIF), an Indian private equity fund managed by Morgan Stanley Investment Management.
NHIIF will focus on investments mostly in private companies building physical and societal infrastructure required to enable large groups of population in India to benefit from economic efficiencies and improved services and social welfare, FMO said.
The fund targets to invest significant minority or majority stakes in companies active in three segments – energy and utilities, mobility and logistics, and social infrastructure (healthcare and education).
Morgan Stanley is looking to raise $750 million of equity capital for its maiden India-focused infrastructure fund. According to earlier reports, the firm had raised close to $300 million in 2018 and another $104.25 million last year.
The Asian Infrastructure Investment Bank (AIIB) also committed up to $150 million to North Haven India Infrastructure Fund in 2017.
Founded in 1970, FMO manages a portfolio worth EUR9.7 billion ($11 billion), spanning over 85 countries, of which EUR2.5 billion ($2.8 billion) is invested in the Asia region. Its average ticket size for investment is EUR15 million ($16.7 million), and it invests across equity and debt.
FMO has invested about EUR703 million ($767 million) in India across 61 companies as of October 2019. As a strategy, the bank focuses on sustainable economic and social development across three sectors— financial institutions, energy, agri-business, food, and water.
It expects its investments in India, its biggest investment destination, to touch EUR1 billion ($1.1 billion) in the next four years.
In a separate announcement, the Dutch lender said it invested almost EUR3 billion ($3.2 billion) in developing countries in 2019 – EUR1.7 billion on its own books, EUR297 million using public funds, and $868 million from third parties.
“In spite of current circumstances, we are proud of the achievements our team realized in 2019, taking into account the economic climate in our markets this year as well as the regulatory environment we need to live up to,” said FMO CEO Peter van Mierlo.
Overall, FMO made a net profit in 2019 of EUR120 million, down from EUR151 million in the previous year as emerging markets experienced challenging economic conditions that hampered investment and growth.
For this year, the Dutch lender said its previous economic growth forecast of around 4-5 per cent in developing and emerging markets will not be realised due to the Covid-19 pandemic.
“The outbreak is a serious risk to global health, the global economy, and financial markets, and it will impact FMO’s operations but the extent to which is uncertain and difficult to assess,” van Mierlo said.