Canada Pension Funds Bet on Asia’s Growth

Canada Pension Funds Bet on Asia’s Growth

CPP Investment Board Teams with Mumbai Group for New Venture; Caisse Buys Australian Port Stake


Nov. 28, 2013 11:50 a.m. ET

TORONTO–Canada’s two biggest pension funds continue to demonstrate their prowess as global investors, making bets that Asia’s economic growth will drive demand for commercial real estate and shipping services. Canada Pension Plan Investment Board, the country’s largest pension fund, said Thursday it is committing $200 million for an 80% stake in a new venture with Mumbai-based Shapoorji Pallonji Group to invest in commercial real estate in India to take advantage of the Asian country’s growing economy.Meanwhile, Caisse de Depot et Placement du Quebec, the country’s second-largest pension fund, said it acquired a 26.7% stake in the Port of Brisbane, Australia’s third-largest container port, to take advantage of increasing exports to Asia as the region’s growing economies spur more trade activity. A Caisse spokesman declined to disclose the deal’s value.

CPPIB, which oversees more than $180 billion in pension assets, and its partner Shapoorji will invest in office buildings in India’s major metropolitan areas, the two said in a release. Shapoorji, an Indian conglomerate, is investing $50 million for its 20% equity stake in the venture. Its business holdings include construction, real estate, engineering and shipping.

Toronto-based CPPIB already had some exposure to India’s growing economy through a $100 million investment in an Indian private equity fund made in 2010.

The latest deal represents the pension fund’s first real estate investment in the country and closely resembles its real estate strategy in other emerging economies such as Brazil.

In July, CPPIB acquired at 27.6% stake in Brazilian real-estate company Aliansce Shopping Centers SA – just one of series of investments in the South American country – betting a growing middle class will lead to increased consumer spending.

Similiarly, the deal in India represents a bet that the combination of India’s economic growth, despite recent hiccups, and a relatively young population will spur job growth and demand for new office space.

“We are taking a longer-term view and trying to get established now in a fairly conservative manner and then expecting that over the next 10 years or so it will continue to develop and we will have a strong presence,” Graeme Eadie, head of real estate investments at CPPIB, said in a phone interview.

Caisse, which oversees more than $175 billion in assets, said in a release the Port of Brisbane annually handles cargo valued at more than $45 billion and is the closest major container port to Australia’s largest export market in the Asia-Pacific Rim.

“This investment…gives us the opportunity to step up our presence in Australia, a resilient market (and) it also contributes to the diversification of our portfolio, from both geographic and sector standpoints,” Macky Tall, a senior executive at Caisse in its infrastructure group, said in a statement.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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