New Delhi: The Finance minister P Chidambaram has launched the National Investment Fund (NIF) on Saturday, after two years since authorization of its establishment.

The NIF has got its initial funding of Rs 994.82 crore from earnings of sales of administration’s 5% stake in Power Grid Corporation of India Ltd (PGCIL) that got listed on Friday. Mr. Chidambaram handed over cheques to the CEOs of the three asset management companies (AMCs) including the UTI Asset Management Company Pvt. Ltd., the SBI Funds Management Pvt. Ltd. and the LIC Mutual Fund Asset Management Company Ltd.

The three AMCs have been nominated as NIF’s fund managers, primarily for two years, but the term would be expanded afterward on the basis of their recital. Separate contracts have been signed with every fund manager.

As was declared previously, all proceeds from central public sector enterprises (CPSEs) disinvestment will be routed to NIF. NIF will be maintained outside the consolidated fund of India and managed in a professional manner in order to supply sustainable proceeds to the administration, without using up the corpus.

Out of the entire corpus, 75% of the yearly income of the Fund will be utilized to finance selected social sector strategies that encourage education, health and employment. The remaining 25% of the annual income will be expended to meet up the capital investment needs of lucrative and revivable CPSEs.

The NIF would be processed by select fund managers under the discretional process of the portfolio management scheme (PMS) that is regulated by SEBI guidelines.

A part-time consultative panel has also been established to give advice the NIF CEO on a variety of operating aspects of the fund including investment plan, allocation of funds to select fund managers, negotiation of management charge and fees to be paid to the fund managers.

The advisory panel consists of ex-LIC Chairman S. B. Mathur, former Oriental Bank of Commerce Chairman B. D. Narang and President, RPG Foundation and Chairman International Life Science Institute, India, D. H. Pai Panandiker.