Canadian funds step up investments in India

Top Canadian funds have invested more than $5 billion in India in the past two years


CDPQ CEO and president Michael Sabia says the Canadian pension fund plans to invest $2.3 billion in India. Photo: Bloomberg
CDPQ CEO and president Michael Sabia says the Canadian pension fund plans to invest $2.3 billion in India. Photo: Bloomberg

Mumbai: Canadian institutions are stepping up investments in India, seeking to tap the changes under way that will sharpen the country’s competitive edge.

In the last two weeks alone, two large Canadian funds—Brookfield Asset Management and Caisse de Dépôt et Placement du Québec (CDPQ)—have announced investments worth about $2 billion in the country.

In the last couple of years, the top Canadian funds have made investments worth more than $5 billion in India, according to public data.

CDPQ, which set up its India office in March, announced a commitment of $150 million to renewable energy in India.

Last month, CDPQ joined hands with Tata Power International Pte. Ltd, ICICI Venture, Kuwait Investment Authority (KIA) and State General Reserve Fund (SGRF) of the Sultanate of Oman, to launch a platform to facilitate investment in power projects in India with an initial capital of up to $850 million.

Last week, CDPQ, the second largest pension fund in Canada, signed a long-term partnership with Edelweiss Financial Service Ltd to invest around Rs5,000 crore (nearly $750 million) in stressed assets and specialized corporate credit in India over the next four years.

“Besides the attractive labour force and governance in India, India’s structural reforms that are gradually changing will make India a more competitive player in the global economy and better equip it for future growth. Each of these represents an important step forward for India and sends a signal to the world’s investors. A signal that India is focused on long-term growth, stability and on becoming an easier place to invest and do business,” said Anita Marangoly George, managing director, South Asia, CDPQ.

With all these investments, CDPQ’s investment in India will be around Canadian $3 billion ($2.3 billion, or Rs15,000 crore), according to Michael Sabia, chief executive officer and president of CDPQ.

CDPQ’s larger rival Canada Pension Plan Investment Board (CPPIB) opened its investment office in India in October 2015. Planning a wide exposure to the Indian infrastructure sector, CPPIB entered India as a direct investor with an investment of Rs2,000 crore in Larsen and Toubro Ltd’s subsidiary L&T Infrastructure Development Projects Ltd (IDPL) in December 2014.

As a limited partner (investor in private equity funds), CPPIB has a large exposure to Indian private equity sector. It has commitments worth $300 million to Renuka Ramnath-led Multiples Alternate Asset Management Pvt. Ltd.

The Canadian fund is exploring various investments options in India including direct investments.

“India is a key long-term growth market for CPPIB and presents good opportunities because of its strong long-term fundamentals. CPPIB is a patient investor and will seek to build long-term partnerships with leading partners across market cycles,” a CPPIB spokesperson said in reply to a query from Mint.

Till date, CPPIB has invested more than $2 billion in India and this is likely to rise, Mint reported in October last year, citing the fund’s top management.

Another Canadian alternative asset manager—Brookfield Asset Management Inc.—has been an active investor in realty, infrastructure and renewable power in India.

Last week, Brookfield Asset Management acquired office and retail assets of Hiranandani Developers Pvt. Ltd in the Mumbai suburb of Powai at a valuation of close to $1 billion—one of the largest commercial real estate deals in recent years. In July, Brookfield and India’s largest lender State Bank of India decided to launch a joint venture fund to which the Canadian fund has agreed to commit Rs7,000 crore to purchase distressed assets.

An email sent to a Brookfield spokesperson on Wednesday did not elicit any response.

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