Canada Pension Plan Investment Board (CPP Investments), Canada’s largest pension fund manager, has committed Rs 1,850 crore (C$310 million or US$228.9 million) to the first close of Kotak Infrastructure Investment Fund (KIIF), CPP Investments revealed in its second quarter financial results.
Part of Indian billionaire Uday Kotak-led Kotak Investment Advisors Ltd (KIAL), KIIF will provide senior and secured financing to operating infrastructure projects in India.
This is likely to be KIAL’s second infrastructure fund, the size of which could not be confirmed. Kotak did not comment on the size, first close and other investors in the fund.
Back in 2013, 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. 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 on the second quarter ending 30 September FY23, CPP Investments’ net assets had risen marginally by $6 billion to $529 billion, compared to $523 billion at the end of the previous quarter.
The Fund’s quarterly results were adversely affected by broad declines in global public and private equity markets and in fixed income markets, the company said in its statement.
Headquartered in Toronto in Canada, 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 & CEO at CPP Investments.
He added, “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%.”
Among its India investments, during the second quarter, the pension fund manager also invested Rs 357.5 crore (US$40 million or C$60 million) in National Highways Infra Trust, an infrastructure investment trust sponsored by the National Highways Authority of India.
The pension fund investor has exposure to different asset classes in real estate, private equity and infrastructure in India.
In April, Graham spoke to VCCircle on 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 companies such as Flipkart, Byju’s, 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 ed-tech startup Eruditus in March.
In distressed assets space, CPP Investments has partnered with India Resurgence Fund, a joint venture between Piramal Enterprises and Bain Capital. The Canadian investor also makes bets in mid-market credit segment through the India credit fund of Baring Private Equity Asia.
As on December last year, CPP Investments’ India portfolio stood at C$19.6 billion (Rs 1.2 lakh crore or $15.5 billion), constituting 3.6% of its total AUM at C$550 billion assets then.
CPP Investments is governed and managed independently of the Canada Pension Plan and also has offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney.
