The Canada Pension Plan Investment Board (CPP Investments), one of the world’s largest pension funds, has made a further ₹3.6 billion (about $44 million) commitment to the National Highways Authority of India’s (NHAI) infrastructure investment trust (InvIT).
In a statement, CPP Investments said the latest commitment follows an initial $187-million investment in NHAI InvIT’s IPO in November 2021. The Canadian pension fund will continue to hold 25% of the units in NHAI InvIT. The Ontario Teachers’ Pension Plan Board also holds 25% of the trust.
InvITs are collective investment vehicles similar to mutual funds, which enable direct monetary investment from individual and institutional investors in infrastructure projects that earn them a small portion of the income as return.
Proceeds from the institutional placement will be used to acquire three brownfield toll roads currently owned by NHAI, a statutory authority set up in 1988 by an act of the Indian Parliament and responsible for developing, maintaining, and managing national highways in India.
Per the announcement, the acquisition will increase NHAI InvIT’s portfolio from five to eight toll roads, which span approximately 636 km across seven Indian states — Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh, and Telangana.
CPP Investments Managing Director and global head of infrastructure Scott Lawrence said institutional capital will continue to play a meaningful role in addressing India’s infrastructure investment needs. “This follow-on investment further deepens our commitment to the NHAI InvIT platform to acquire road projects across the country,” Lawrence said.
CPP Investments manages the funds of 21 million contributors and beneficiaries of the Canada Pension Plan.
In Asia, including China and India, the pension fund has made a total of at least $404 million in private equity commitments in the second quarter of this year, its latest report shows.
In the April-June quarter, CPP Investments committed to a $120-million co-investment alongside CVC Capital into Sajjan India Limited, a specialised agrochemical manufacturer in India, for up to a 17% stake. It also committed $100 million to Trustar Capital V, the latest fund of Trustar Capital Partners, which focuses on control-oriented buyouts in Greater China.
CPP Investments further committed to a $50-million co-investment alongside Multiples into Acko Tech & Services, India’s pure-play digital insurance platform focused on retail customers, and another $34 million to Kogta Financial Limited, a non-banking financial company in India, for an approximate 9% stake.
The pension fund likewise closed a $35-million co-investment alongside CVC Capital in gaming hardware maker Razer Inc, which delisted in May.
Besides PE commitments to Asian funds and companies during the quarter, CPP Investments also closed an aggregate commitment of $333 million to Sequoia Capital’s 2022 fundraising, which includes commitments to the Sequoia China funds and the Sequoia India/Southeast Asia funds.
It also committed $150 million to NewQuest Asia Fund V of NewQuest Capital Partners. NewQuest’s funds primarily target companies across emerging Asia.
The PE commitments to Asian funds and companies came even as CPP Investments returned a negative 4.2% in the April-June quarter, driven by losses in public equity strategies due to the broad decline in global equity markets.