PMF-II will build on the strategy and lessons of its predecessor, aiming to develop a diversified portfolio of 12-15 portfolio funds and portfolio companies. PMF-II will invest primarily in growth and venture capital funds, with the flexibility to allocate up to 25% of its corpus for direct equity through co-investments in qualifying companies, thereby combining fund of funds diversification with targeted exposure to selected investments.

The objective of the Project is to provide long term equity capital to catalyze private capital in sectors aligned with NDB mandate, while supporting the development and deepening of India’s private equity and venture capital markets.

NIIF, acting as fund manager, will deploy capital into a diversified set of portfolio funds selected according to the investment strategy. This diversification is designed to balance sectoral exposure, risk, and return objectives. Each portfolio fund will operate independently under its own investment strategy and regulatory approvals, investing capital into underlying projects across various sectors, in alignment with their respective mandates. NDB will monitor its investment as a representative on PMF-II advisory board.

The Project has been categorized as Category FI-A in line with the NDB Environment and Social Framework (ESF). NIIF has developed an E&S Management System (ESMS) that includes several key processes and elements: (i) screening and categorization; (ii) ESG due diligence; (iii) ESG action plan with covenants to be included in investment contracts; and (iv) post-deal ESG supervision. An Environmental and Social Impact Management Plan has been developed to ensure compliance with the provisions of the country systems and the NDB ESF.