While two of the three people said the second FoF is expected to be finalized and presented for shareholders’ approval soon, the third person noted that the plan is still in its initial stages and is expected to be launched later this year.

The proposal for the new mega fund comes amid reports that managing director and chief executive Sujoy Bose, who has been at the helm of NIIF since its inception in 2016, may quit.

NIIF’s first FoF received commitments of $600 million, with an aim to invest in up to 10 private equity funds managed by experienced fund managers in India. A FoF aims to raise money and invest it in other funds rather than directly in the assets themselves. This enables the FoF to diversify its portfolio and spread the risk across asset classes, industries, and markets.

In NIIF’s case, its portfolio funds would each invest in Indian companies across sectors, including green infrastructure, affordable housing, infrastructure services, agri-business, healthcare and education. So far, FoF Fund I has committed to deploying 90% of its corpus across seven funds, including the latest in Lighthouse India Fund IV AIF, where it proposed to invest ₹400 crore in January.

Besides Lighthouse, the first FoF has backed Green Growth Equity Fund, HDFC Capital Affordable Real Estate Fund 2, Multiples Private Equity Fund III, Somerset Indus Healthcare India Fund II, Arpwood Partners Fund I and YourNest Innovative Products VC Fund III.

“Maybe one or a couple more investments are likely to take place from the remaining capital (from the FoF Fund I),” one of the people cited above said.

Email and messages sent to NIIF’s Bose and the company’s spokesperson did not elicit a response till press time.

NIIF’s FoF is one of the largest India-dedicated fund-of-funds programmes.

Launched in 2018, NIIF’s FoF I is backed by the government and has received commitments from multilateral institutions such as the Asian Infrastructure Investment Bank, Asian Development Bank, and New Development Bank.

Its other foreign limited partners (LPs) include US International DFC, retirement fund AustralianSuper, Singapore’s Temasek and Canadian pension funds like CPP Investments, Ontario Teachers’ Pension Plan and PSP Investments. Its domestic LPs are Housing Development Finance Corp., ICICI Bank, Axis Bank, and State Bank of India.

NIIF is also set to launch its maiden InvIT for its road assets, with an aggregate portfolio of approximately $2 billion. It plans to raise growth capital of $500 million from both global and domestic investors, The Economic Times reported in March, citing multiple people aware of the development.

A quasi-sovereign investment platform, NIIF manages over $4.3 billion of equity capital commitments across three funds – Master Fund, FoF and Strategic Opportunities Fund.

The Strategic Opportunities Fund, through which NIIF takes direct stakes in companies, until last year raised around $1.1 billion, half of its targeted corpus of $2 billion. It has backed FirstCry, an e-commerce company specializing in baby and kids products, and electric two-wheeler company Ather Energy. It recently marked its first exit from Manipal Health Enterprises by selling a stake to Temasek.

Meanwhile, NIIF’s Master Fund invests in businesses and assets across core infrastructure sectors and is one of the largest India-focused infrastructure funds.

It has built a portfolio across ports and logistics, renewables, smart meters, roads and digital infrastructure backing assets such as Shapoorji Pallonji Group’s SP Jammu-Udhampur Highway Ltd, Hindustan Ports Pvt. Ltd (HPPL), among others, with the most recent bet on GMR Goa International Airport Ltd.