Hearing about a government fund fundraise capital from other state-owned investors should not be longer a surprise. The “Russian model” (after RDIF) of establishing a public vehicle to catalyze foreign co-investors via partnerships was quickly followed by other European countries (Italy, France, Spain) and is now big in Asia (India, Indonesia).

India’s NIIF and Indonesia’s INA follow a similar goal: a collaborative investment platform to raise interest in their country’s infrastructure and other key industries. However, their legal set up is slightly different as the former keeps a LP-GP structure with formal fundraising processes, while the latter chases “Investment Framework Agreements” (IFAs).

Last Thursday, NIIF announced an additional investment of US$ 300 million in DP World-run Hindustan Ports Private Ltd, via its Master Fund. And this is an interesting concept: investors from Canada, Singapore and Australia commit capital to an Indian government fund, which subsequently invests in some domestic ports run by an Emirati investor.

All three sub-funds managed by NIIF Ltd are 49% owned by the Government of India, which makes sure to put some skin in the game and to reap some of the rewards. The Master Fund closed with US$ 2.3 bn, and the Fund of Funds and the Strategic Opportunities Fund have attracted US$ 0.8 bn and US$ 1.1 bn respectively so far. The SOF completed its first direct VC investment last month with Ather Energy’s Series E, after its deal with FirstCry fell through.

On the flip side, Indonesia’s INA announced today a new IFA, this time for US$ 3 bn from China’s Silk Road Fund, a joint venture between SAFE and CIC, among others. The commitments received till now had been concentrated in the UAE, after a US$ 1.25 bn commitment by ADIA, a US$ 10 bn IFA with ADG, and a US$ 7.5 bn platform with DP World.

The Government of Indonesia has already transferred US$ 5 billion into INA, and will see its interest diluted significantly if / once all these agreements come to fruition. It is not clear what platform will SRF’s IFA focus on but probably traditional infrastructure given the nature of the JV. Chinese investors have not committed capital to India’s NIIF so far.

As is customary, a comparison between the Indian and the Indonesian SWFs must be taken with a grain of salt, but they are nonetheless two very interesting case studies that are changing the paradigm of the SWF industry very rapidly. The model could be soon put to the test in Africa among the many strategic funds currently flourishing there.

Related funds INA NIIF