Canada's pension fund CDPQ bets big on India story with $4.5 bn investment

CDPQ plans to continue doing more local partnerships and identify partners to work with in sectors such as logistics, health care, financial services and real estate.
Caisse de dépôt et placement du Québec (CDPQ), the second largest pension fund in Canada has made a total investment of $ 4.5 billion since opening its office in the country in April 2016.

Founded in 1965, CDPQ manages at least $298 billion of assets globally.

“India is one of our key growth markets. We have established quality partnerships and are working on some promising relationships that will be developed over the next two-three years,” said a spokesperson for the fund. 

In October 2016, CDPQ entered into a partnership with Edelweiss for the latter's asset reconstruction (ARC) business for around $600-700 million over a four-year period, she said.

It invested $120m in Azure Power, a solar-power company with a  portfolio of 1.7 gw of assets, which include deals on ground-mounted and rooftop solar projects with commercial clients.

“We continue to look at other sectors in infrastructure, including other forms of renewable energy (wind) and roads, in particular,” the spokesperson said.

 
It has partnered with Tata Power and ICICI Venture in Resurgent Power Ventures (RPV), one of the country’s largest platforms for distressed energy assets, with $850 million of capital from its partners.  

CDPQ's engagement in the logistics sector include a $170 million investment in TVS Logistics. CDPQ’s subsidiary, Ivanhoe, has committed $400 million to LOGOS Group and Assetz Property Group for warehouse facilities. In financial services, the company has committed about $1.2 billion. It has invested $255 million in Kotak Mahindra Bank and made investments of $175 million in Piramal Enterprises and $90 million in HDFC. Piramal recently set up a housing finance unit.  

An investment of $20 million to Fundamentum Growth Fund, set up by Infosys co-founder and chairman Nandan Nilekani and Helion Ventures founder Sanjeev Aggarwal, is noteworthy.  “It is no surprise why India is the third largest market for start-ups.  The challenge will be to scale up these to become global players that serve several million customers in India and over the globe,” the spokesperson said. 

For a long-term investor like CDPQ, making debt investments will be another area of focus in India, he said. It has started investing in sovereign bonds, investing $130 million.  “We are interested to provide financing solutions, including private and structured credit.” he said.

CDPQ plans to continue doing more local partnerships and identify partners to work with in sectors such as infrastructure, logistics, health care, financial services and real estate,  she said. In early 2016, the company announced its entry into India and appointed Anita Marangoly George its managing director for South Asia.

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