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Canadian pension fund CPPIB expanding India bets

LiveMint logoLiveMint 26-04-2017 Devidutta Tripathy

Canada Pension Plan Investment Board (CPPIB), the country’s largest pension fund manager, is exploring opportunities in India’s financial services, telecoms and logistics sectors to expand its bets in the South Asian economy, CPPIB’s Asia Pacific head Suyi Kim said on Wednesday. CPPIB, which has poured more than C$4 billion ($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 investment in emerging markets in its overall portfolio, Kim told Reuters.

The roughly C$300 billion fund has about 10% of its portfolio invested in emerging markets, and aims to boost that to about 15% 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 to about 6.3% by buying additional shares in the fourth-biggest Indian private sector lender by assets.

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%.

“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% 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 $12 billion, vastly expanding its lending business. Reuters

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