13 April , 2022 Fdiindia
India Is a Magnet for Global Investors: John Graham, CPPIB
The chief executive of the largest retirement fund in the world said that a combination of scale and breadth across asset classes is among the top reasons why money goes into India. One of India's main drivers of foreign investment is its vast infrastructure projects, including power grids, toll roads and bridges, renewable energy infrastructure, and airports, which makes it a perfect place to build capital.
As CPPIB has scaled and evolved, it has become more important to build infrastructure to make investments outside the borders of Canada. One of the ways that we're doing this is by working with customers who are committed to investing in India through CPPIB. So far, only 3.06% of our assets have been deployed here, but we hope to see that number grow soon as we continue to work with our customers on various different projects throughout the vast country!
During his five-day maiden trip to India as the new chief of the Canada Pension Plan Investment Board (CPPIB), he met with Prime Minister Narendra Modi. Over a mix of business meetings and social outings, where he even broke bread with a group of young entrepreneurs over breakfast, he discussed investment opportunities in India with the country's finance minister.
Machin left the citizenship division after his journey to the United Arab Emirates to get a vaccine against Coronavirus despite federal rules prohibiting travel. This caused Graham's promotion, a previous research scientist who worked at Xerox for almost ten years before he became a managing director of the Canada Pension Plan Investment Board in 2008 and expanded its credit business for over nine years.
But Why Does Diversification Matter?
Since 2018, Canada Pension Plan Investment Board has been manipulating its exposure to emerging economies — and China in particular — in the hunt for juicier returns (ROI). More than 90% of CPPIB's funds are invested outside of Canada, with Asia Pacific being the largest geographical cluster after the US. Plans to increase exposure to Asia's most extensive global growth market since 2000 and allocate up to 70% of its assets to the country by 2025 as part of China's "Belt and Road Initiative" are still on target.
You must be diversified. There's no need to fear deploying capital into foreign markets. They may have differing economies, but they still represent opportunities that should be considered worthwhile in terms of potential asset gains and even profitable partnerships, especially since they are opening up more regions than ever before to international investment.
Graham said Covid did not impact the long-term investment strategy, but through the pandemic, the firm was tactical and invested in "unique" opportunities that presented themselves.