National Investment & Infrastructure Fund’s long-drawn hunt for a new Chief Executive Officer is raising concerns among investors, according to people familiar with the matter, potentially posing a risk to the government’s plans for the business.
(Bloomberg) — National Investment & Infrastructure Fund’s long-drawn hunt for a new Chief Executive Officer is raising concerns among investors, according to people familiar with the matter, potentially posing a risk to the government’s plans for the business.
The board of India’s state-backed fund has tapped recruitment firm Russell Reynolds to conduct a search, but there’s been scant progress about 11 months after Sujoy Bose prematurely left, said the people, asking not to be identified discussing a private matter. Some external candidates have been cautious due to uncertainty around the fund’s strategy and the extent of government influence, said the people.
NIIF, as the fund is known, counts a clutch of global and domestic investors as backers, including Abu Dhabi Investment Authority and Temasek Holdings Pte. Some investors are closely watching the process, and further delays could impact their willingness to commit to new fundraising by NIIF, they said.
For now, the heads of various NIIF units, including Master Fund, Fund of Funds and Strategic Opportunities Fund, are steering their individual businesses, though a cohesive investment strategy for the $4.3 billion fund is lacking, the people said. Delays in recruiting a new CEO may start to hit the growth of NIIF, through which the government hopes to raise billions of dollars to improve the nation’s infrastructure, they said.
NIIF and Russell Reynolds didn’t respond to a request for comment. A finance ministry spokesperson didn’t respond to a text message seeking comment.
In May, the company named its chief operating officer Rajiv Dhar as CEO on an interim basis till a permanent replacement is found for Bose. Bose announced his intention to step down in September, a few years before the end of his term, in what many saw as evidence of the government’s frustration over the fund’s performance.
India’s Finance Minister Nirmala Sitharaman last year said she would like the firm to be “more robust” and would review it.
NIIF is India’s first major attempt to develop a capital-raising structure on home soil, and is majority-owned by global investors. The Indian government, with a 49% stake, is its largest shareholder. The fund primarily invests in local companies that build power plants, airports and roads, and provides long-tenure loans through its new shadow bank unit.
–With assistance from Ruchi Bhatia.
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