Canadian pensions are in love with India

Canadian-Indian relations have been, shall we say, testy lately. But you wouldn’t know it from looking at the investments Canadian pension funds are making. 

What happened: The Ontario Teachers’ Pension Plan (OTPP) will invest ~$107 million in Indian B2B fintech company Perfios, unlocking unicorn status. It’s the latest investment OTPP has made into an Indian startup since launching an Indian investment drive in 2022. 

  • OTPP plans on India accounting for as much as 10% of its assets one day, pouring cash into companies like shipping startup Xpressbees (US$80 million) and unicorn VerSe Innovation (part of a collective US$805 million investment). 

Big picture: Major Canadian pension funds have been pouring money into India over the past few years. In particular, they’ve been attracted to tech and infrastructure investments. Everything from buzzy tech leaders like Flipkart to office buildings have seen pension cash.

  • The Canada Pension Plan (CPP) has made several big investments in Indian tech since 2010, with its total investments in the country surpassing $20 billion last year.

  • Caisse de dépôt et placement du Québec (CDPQ) has invested ~$9 billion in India, with plans to buy five large road projects, embedding itself deeper into infrastructure. 

Why it matters: As one of the world’s fastest-growing economies and the most populous nation, India is undergoing rapid urbanization and a tech boom spurred by a tech-savvy workforce, making it a slam-dunk target for Canadian funds looking to secure returns on (your) pension dollars. 

Zoom out: Pension funds migrating to India is simply part of a broader trend of the West investing there, betting it will displace China as the world’s “next big growth engine.”—QH