India presents interesting investment opportunities: CPPIB

The Canada Pension Plan Investment Board (CPPIB) plans to invest up to a third of its funds in emerging markets, including India as has interesting investment opportunities, over the next five years.

Suyi Kim, CPPIB’s Asia-Pacific head, as per CNBC, described India as a key component. “Our investments in India span different asset classes including infrastructure, real estate, public and private equities, funds and co-investments and credit,” Kim said. “We see domestic consumption, technology and increasing demand for infrastructure to support the growth underpinning many of the themes and opportunities we look at in India.”

CPPIB manages about $434.4 billion as of June 30, with a bulk of its investments in North America, 34 per cent in the United States and the rest in Asia. In India, some of its investments are in Kotak Mahindra Bank, as well as $225 million in the India Resurgence Fund. The Board, in December, agreed to invest up to $600 million in India’s National Investment and Infrastructure Fund that included a $150 million commitment in NIIF’s Master Fund and co-investment rights of up to $450 million in future opportunities. “The ongoing credit issues in the financial services industry, which have been exacerbated by the pandemic’s impact on the economy, also present interesting investment opportunities to provide long-term, stable capital to select financial institutions and companies to finance India’s next growth cycle,” Kim said.

The Board’s CEO Mark Machin, in 2017, had said CPPIB would love to invest more in credit. He said the Board would also want to do more private equity. “In India, which has a huge rising middle class, we would like to invest in financial services, education, healthcare, retail and things related to consumption and the rising power of the middle class consumer,” Machin said. “We are looking for good risk-adjustable returns.”