Ontario Teachers to up India exposure, back Kedaara Capital
Ontario Teachers’ Pension Plan (OTPP) plans to increase its allocations to India and Latin America in order to diversify its emerging markets exposure, which is currently more weighted towards China. The pension plan’s first India commitment was to Kedaara Capital, the PE firm set up by Manish Kejriwal, formerly of Temasek Holdings, and ex-General Atlantic executives Sunish Sharma and Nishant Sharma.
"India's too big to ignore. We should get a snapshot into what's taking place in the market, and we hope that in working with Kedaara that that will be a good insight into the country," Jane Rowe, senior vice president of OTPP's private capital unit, told Bloomberg.
The pension plan, Canada's third-largest, has C$117 billion ($115 billion) in assets under management, including C$11.5 billion in private investments, primarily in North America, Western Europe and Asia. The private equity unit was set up in 1991 and has generated an IRR of 19% to date, with more than C$23.6 billion deployed in more than 300 companies and funds.
OTPP has a higher profile than most North American institutions when it comes to direct investments in Asia. In the last few months, it has paid KRW470 billion ($398 million) for a 9.9% stake in South Korean insurer Kyobo Life and taken out a long-term lease on Sydney Desalination Plant with Hastings Fund Management, in a A$2.3 billion ($2.35 billion) deal.
The pension plan is working with Unitas Capital on a bid for Singapore-based industrial fasteners manufacturer Infastech that could be worth more than $750 million. OTPP and Unitas previously teamed up to buy New Zealand Yellow Pages in 2007.
OTPP isn't the only Canadian pension plan looking to increase its India exposure. Earlier this year Canada Pension Plan Investment Board (CPPIB) announced that it has retained VSG Capital Advisors, an investment bank recently set up by former Credit Suisse executive Vikram Gandhi, as its India-based consultant. VSG will provide strategic advice and develop and facilitate investment opportunities for the pension fund in the Indian sub-continent.
Kedaara Capital is said to be nearing a $200 million first close on its maiden vehicle, with Clayton, Dubilier & Rice (CD&R) among the investors. The final target is $500 million.
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