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Mumbai: CPP Investments is among the largest pension fund buyers in India, having invested throughout non-public fairness, infrastructure, actual property and different asset courses. In an interview, Suyi Kim, senior managing director and international head of personal fairness defined why at Canada’s largest pension fund supervisor is bullish on India, and the themes it’s investing in. CPP’s India investments kind about 4% of its international portfolio as of 31 December. Edited excerpts:
Mumbai: CPP Investments is among the largest pension fund buyers in India, having invested throughout non-public fairness, infrastructure, actual property and different asset courses. In an interview, Suyi Kim, senior managing director and international head of personal fairness defined why at Canada’s largest pension fund supervisor is bullish on India, and the themes it’s investing in. CPP’s India investments kind about 4% of its international portfolio as of 31 December. Edited excerpts:
How have the worldwide headwinds modified your funding technique in Asia? Has India gained extra favour over different Asian economies?
How have the worldwide headwinds modified your funding technique in Asia? Has India gained extra favour over different Asian economies?
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Our broader funding thesis for investing in Asia, particularly rising Asia, has been urbanization and consumption pushed by a rising center class. This stays the case regardless of some macro challenges. As a long-term, international investor, we diversify throughout a variety of asset courses and geographies to mitigate focus danger and ship a stronger and extra resilient portfolio. India is among the key markets for us globally and in addition one in every of our largest when it comes to workers on the bottom. We consider India will likely be a number one supply of world development for many years to come back, supported by constructive demographics and a rising center class.
On the non-public fairness aspect, which sectors are you betting extra on? Any sectors that you just need to go sluggish on within the close to time period?
We don’t “wager” on sectors. Rather, we invest in themes that we think will perform over the long run. In Asia, for example, we have been investing in the consumption and urbanization theme and that’s across many sectors: consumer retail, education, logistics/real estate, healthcare, technology and more. That’s also evident in our investments in India – we have investments across real estate, infrastructure, public and private equities, funds and co-investments and credit. We will continue to look at companies in different sectors that align with our long-term investment thesis.
The recent episode at a major Indian conglomerate has again raised the spectre of poor governance standards. What’s your view of corporate governance standards in India?
I can’t comment on specific companies. We view sustainability-related, or ESG, considerations as business-critical. We have been incorporating these considerations into our investment activities for more than 10 years. Corporate governance is one of many areas that we evaluate for potential direct and public equity investments. We believe that good corporate governance enhances long-term shareholder value. Asia, including India, has made great strides in corporate governance over the years but more can always be done.
As an investor and shareholder, we actively promote the adoption of improved governance practices at our portfolio companies. For example, we have Proxy Voting Principles and Guidelines for our public portfolio companies. These provide guidance to portfolio companies on how we are likely to vote across a number of key issues including governance, board diversity, executive compensation and sustainable investing including climate change. For the year ended June 30, 2022, we conveyed our views at 3,817 companies’ annual and special meetings of shareholders and voted against the management in nearly 12% of the cases.
Given the slowdown in the tech sector, how are you looking at late-stage tech investments in India?
We take a long-term view on our investments. Technology is more than just a singular sector – it is extremely broad, and you can argue there is a tech element in every industry now. It will continue to play a critical role in our lives. India has been at the forefront of some of the technology sectors. For example, the IT services industry was invented in India more than 25 years ago and it is still thriving. There continues to be a lot of investing interest behind it.
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