The Canada Pension Plan Investment Board (CPPIB) has become the largest private equity (PE) investor in India this year. Suyi Kim, head of Asia-Pacific for the CPPIB, tells Abhineet Kumar in an interview how it plans to grow from here. Edited excerpts:
CPPIB has invested over $1.5 billion so far. Where does India stand in terms of your investments in emerging markets and where do you expect to be in the next five years?
The CPPIB is a significant investor in India with an office in Mumbai and investments totalling approximately C$5.8 billion ($4.6 billion). Our investments include real estate, infrastructure and financial services, co-investments in companies alongside our fund partners, and other public holdings. While we do not have a target for investments in India, a strong Indian economy combined with overall growth anticipated for the fund mean that our investments in the country are likely to grow in the coming years. We believe that India will be a leading source of global growth in the coming years and that there will continue to be attractive investment opportunities. Opening an office in Mumbai demonstrates our long-term commitment to India.
Could you share your investment target for emerging markets in the next five years?
In terms of overall portfolio, on March 31, 2017, the CPP Fund totalled $316.7 billion. The CPP Fund is expected to grow substantially in the coming years and is projected to reach approximately $370 billion by the end of 2020. Currently the CPPIB’s emerging markets portfolio constitutes approximately 10 per cent of the overall portfolio. We plan to prudently increase our allocation to emerging markets to approximately 15 per cent in the next five years.
Which other markets do you plan to invest in over the next five years?
We adopt a truly global perspective as we invest across a wide range of asset classes and seek the best possible investment opportunities wherever they may be. We currently have private holdings in 45 countries. Broadly we look to invest in developed markets in North America, Europe and Asia-Pacific, as well as in emerging markets like China, India and Latin America.
Which sectors are you targeting for investment in India?
As we do globally, we will look at investments in India across sectors and asset classes to identify opportunities that provide the best risk-adjusted returns for the CPP Fund over the long term. When we do invest in a market, our preferred model is to invest alongside strong local partners who provide deep local knowledge and operating abilities. We feel that we have been able to partner some of the best companies in India.
What is the size of your team in India and how do you see it grow in the next couple of years?
The strong local talent at our India office has allowed us to build long-term relationships with key partners and manage our growing portfolio of investments. There have eight employees in our Mumbai office and expect that number will grow in line with the needs of our various investment departments.