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Canada Pension Plan Investment Board (CPP Investments), Canada’s largest pension fund manager, has committed 1,850 crore ($229 million) to the first close of Kotak Infrastructure Investment Fund (KIIF), CPP Investments said in its second quarter financial results.

Part of the billionaire Uday Kotak-led Kotak Investment Advisors Ltd (KIAL), KIIF provides senior and secured financing to operating infrastructure projects in India.

This is likely to be KIAL’s second infrastructure fund. The size of the fund could not be confirmed immediately.

Kotak didn’t immediately respond to an email query on the size, first close and other investors in the fund.

KIAL, which manages a $5.7 billion book across asset classes such as private equity, real estate, infrastructure, and stressed assets/special situations vehicles, had hit the first close of the maiden infrastructure fund with a corpus of $250 million in 2013. It typically invests $15-18 million per transaction in the mid-sized infrastructure market.

The investment by CPP Investments is part of its credit investments. Globally, as of the fiscal second quarter ended 30 September, CPP Investments’ net assets grew to $529 billion, from $523 billion at the end of the June quarter.

The Fund’s quarterly results were adversely affected by declines in global public and private equity markets and in fixed income markets, the company said in its statement.

Headquartered in Toronto, CPP Investments manages a global portfolio in public equities, private equities, real estate, infrastructure and fixed income.

“Our portfolio remains resilient despite inflationary pressures, increases in central bank rates and the continued impact of the war in Ukraine, which resulted in the continued decline in global financial markets during the quarter," said John Graham, president and chief executive at CPP Investments.

“Our active management strategy, designed to deliver results over the long term, remains on track as demonstrated by our strong 10-year net return of 10.1%," he said. Among its India investments, during the September quarter, the pension fund manager also invested 357.5 crore in National Highways Infra Trust, an infrastructure investment trust sponsored by the National Highways Authority of India. CPP Investments has exposure to different asset classes in real estate, private equity and infrastructure in India.

Graham had in an interview in April outlined CPP Investments’ plans to grow its India credit business through its ‘sponsor finance’ portfolio, by extending credit to private equity fund managers for their deals. The Canadian investor has also made equity investments in several Indian technology firms such as Flipkart, Byju’s, and Daily Hunt’s parent Verse Innovations, and will continue to allocate capital to such investments, Graham said. CPPIB also made a $350 million credit investment in edtech startup Eruditus in March.

In the distressed assets space, CPP Investments has partnered with India Resurgence Fund, a joint venture between Piramal Enterprises and Bain Capital. The investor also makes bets in mid-market credit segment through the India credit fund of Baring Private Equity Asia.

As of last December, CPP Investments’ India portfolio stood at C$19.6 billion ($15.5 billion), comprising 3.6% of its total AUM at C$550 billion assets at the time. CPP Investments is governed and managed independently of the Canada Pension Plan. It also has offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney.

ABOUT THE AUTHOR

Beena Parmar

Been Parmar is a financial journalist based in Mumbai. She has reported on the banking and finance sector for over 10 years. She now writes on the alternative investment ecosystem from India - private equity, venture capital and especially startups. She loves to read about politics, society and humane stories.
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