Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers, has entered into a long-term partnership with the Indian financial group Edelweiss Group to invest in stressed assets and special situation credits.
The pension fund will commit a total of $600-700 million over a four-year period to the group and will also acquire a 20 percent stake in Edelweiss Asset Reconstruction Company (EARC), the non-performing asset acquisition arm of Edelweiss. It will sit on EARC's board and committee to oversee investments.
The platform will invest in assets with the aim of restructuring debt and turning companies around, as well as to provide finance to Indian entrepreneurs and firms.
“We believe India stands out as an exceptional country to invest in, given the scope and quality of the investment opportunity and the government’s intention to pursue essential economic reforms,” said Michael Sabia, president and chief executive officer at CDPQ.
“Recent reforms, like the Bankruptcy Act, have the potential to transform the pace of reconstruction and resolution in India’s stressed and distressed market, thus creating a much bigger opportunity. We are pleased to partner with CDPQ, one of the largest and most respected pension fund management companies in the world, to help finance, restructure and grow financially viable businesses in India,” added Rashesh Shah, chairman and chief executive officer of Edelweiss Group.
Together with other investors, the partnership will bring about $1.8 billion into the Indian private debt and restructuring market.
In August, Edelweiss Group launched a new distressed fund targeting a corpus of $740 million to $1 billion. It will work alongside EARC to turn around distressed assets and nurse them back to financial health.
EARC is the largest asset reconstruction company in India with $4 billion of assets under management. In addition to the 20 percent stake to be taken by CDPQ, other shareholders include Indian investors with 16 percent and a Scandinavian insurance company with 4 percent.
CDPQ opened an office in New Delhi this year and appointed Anita Marangoly George as managing director of South Asia to identify investment opportunities in the region.