CDPQ Goes Local for Private Credit in India

Caisse de dépôt et placement du Québec, which manages funds primarily for Canadian public and parapublic pension and insurance plans, has formed a partnership with Piramal Asset Management Private Limited to invest in illiquid credit opportunities in India.

The two organizations will invest US$300 million, with 75 percent of the money coming from CDPQ and the remainder from Piramal. CDPQ oversees C$326.7 billion (US$246 billion) in net assets.

CDPQ’s partnership with Piramal, an India-based manager that is part of Indian conglomerate Piramal Enterprises Limited, will offer private credit solutions to companies in a broad range of sectors, including manufacturing, consumer, industrial, healthcare, pharmaceuticals, and logistics.

The Canadian pension manager has worked with Piramal Enterprises in other asset classes since 2017. Among other things, CDPQ’s real estate group, Ivanhoé Cambridge, has committed US$250 million for co-investments with Piramal to fund high-quality residential developers.

“This is another opportunity for CDPQ to work with the best partners in a market where we see many possibilities over the long term,” Anita George, CDPQ’s head of strategic partnerships for growth markets, said in a statement. According to George, who was traveling at press time, the platform will support “India’s thriving entrepreneurship.”

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Alternative investment firmInvestcorp has recently arguedthat with China shrouded in uncertainty, allocators should turn their attention to India. According to the alternatives firm, many of the same themes that have made institutional investors salivate over China’s investment opportunities are still relatively nascent in India.

When it comes to urbanization, India is where China was back in 2000, according to Investcorp's research, entitledA Different India: Opportunities from India’s Urbanization Dividend and Structural Reforms. Over the next 20 years, the top-ten fastest-growing cities in the world are expected to be in India as the country urbanizes at a historic pace, supercharging the economy and creating investment opportunities.

That's not lost on CDPQ and Piramal.

“The partnership will focus on performing credit and look to invest in companies with a scalable business model that have demonstrated strong execution capabilities, robust cashflows, a validated repayment history with lenders, and that require capital to support the continued growth of their businesses,” said Khushru Jijina, managing director of Piramal Capital & Housing Finance Ltd, also in a statement.