One of North America’s largest pension fund managers Caisse de depot et placement du Quebec (CDPQ) has partnered with Mumbai-based Edelweiss Group to invest Rs 5,000 crore in stressed assets and private debt in India over four years.
CDPQ will also acquire a 20% equity stake in Edelweiss Asset Reconstruction Company (ARC). Edelweiss ARC has about Rs 30,000 crore in assets. CDPQ held $254.9 billion in net assets as of June 30.
“Through different Edelweiss funds, Edelweiss ARC will purchase non-performing loans from Indian banks and invest in private debt of growing Indian companies,” the companies said.
The partnership aims to channel Rs 12,000-14,000 crore, which includes CDPQ’s 5,000 crore and the investments of Edelweiss Group and other global institutional investors, into private debt and the restructuring of stressed assets.
“We believe India stands out as an exceptional country to invest in, given the scope and quality of investment opportunity, and the current government’s intention to pursue essential economic reforms,” said Michael Sabia, president and CEO, CDPQ.
CDPQ will be on Edelweiss ARC’s board of directors and on the Edelweiss Group Investment Committee, overseeing private debt and stressed-asset investments.
“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 larger opportunity,” said Rashesh Shah, chairman and CEO, Edelweiss Group.
Edelweiss Financial Services shares closed 8.5% up at Rs 122.90 on the BSE.