Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund manager, is exploring opportunities in the financial services, telecoms and logistics space in India as it looks to expand its bets in the South Asian economy, CPPIB Asia Pacific head Suyi Kim said on Wednesday.
CPPIB, which has already poured over $4 billion (US$3 billion) into real estate and other investments in the country, will expand its eight-member team in India in a measured manner, as it looks boost the share of emerging markets in its overall portfolio, Kim told Reuters.
The roughly $300 billion (US$221 billion) fund currently has about 10 percent of its portfolio invested in emerging markets and is looking to boost that to about 15 percent over the next three to five years, she said.
“All our teams — infrastructure, real estate, private equity and natural resources — are looking for opportunities,” Kim said, adding that India’s fast-growing financial services sector is among the bright spots.
Last month, CPPIB raised its stake in Kotak Mahindra Bank, India’s No. 4 private sector lender by assets, by acquiring another 1.5 percent along with peer Caisse de dépôt et placement du Québec for 22.55 billion rupees (US$352 million). As of end-March, it owned 6.3 percent of the lender.
Kim said that CPPIB is interested in traditional banks and would look at any further opportunity to increase its stake in Kotak, though current Indian regulations would cap its holdings at 10 percent.
“Globally we’ve invested in a number of insurance companies and we will, over time, hopefully look at that in the Indian market,” she said, adding that CPPIB is also attracted to other parts of India’s non-banking financial arena.
Kim declined to comment on whether CPPIB was in the running for a 25 percent stake that Canada’s Fairfax Financial Holdings is looking to sell in India’s largest private general insurer ICICI Lombard.
She said that CPPIB could also consider private equity lending in India through a joint venture. In 2015 CPPIB bought GE Capital‘s private equity lending portfolio for US$12 billion, vastly expanding its lending business.
Telecoms and renewables
CPPIB and U.S. private equity giant KKR & Co also agreed last month to acquire a 10.3 percent stake in mobile masts operator Bharti Infratel for 61.9 billion rupees (US$952.75 million).
“Mobile data consumption is growing. As a long-term investor we see this as an attractive opportunity,” Kim said.
Asked if CPPIB would consider acquiring a stake in the Indus Towers joint venture in which Vodafone and Idea Cellular are planning to sell their stakes, Kim said: “We’re interested in not only that, but other telecoms opportunities.”
Vodafone and Idea plan to divest stakes in the business as part of a deal to combine their Indian mobile operations, with media reports having cited CPPIB as a potential suitor.
Renewables would be another focus area for the fund. “India and China are making a huge push in renewables and we think that there could be opportunities for us here,” Kim said.
(Reporting by Devidutta Tripathy and Euan Rocha; Editing by Subhranshu Sahu and David Goodman)
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