The anchor investors in the first private infrastructure investor trust in India are the $262 billion Canada Pension Plan Investment Board and the investment arm of Munich’s Allianz insurance companies.
IndInfravit will obtain five operational toll roads in India to start, growing through additional road related infrastructure investments. The roads will be built by Infrastructure Development Projects Limited, IndInfravit’s sponsor.
The toll roads reach across the four Indian states of Karnataka, Telangana, Tamil Nadu, and Rajasthan, which have a combined total population of 238 million people who account to almost one-quarter of the country’s GDP. The roads have been active for about five years.
The Canada pension board will invest C$200 million for 30% of IndInfravit Trust units, of which Allianz Capital Partners recently acquired 25%. Another 15% of the units will be held by L&T. The remaining units have gone to other institutional investors. L&T’s subsidiary will be the investment manager for trust.
Scott Lawrence, the Canada board’s managing director and global head of infrastructure, said that the Indian economy brings “a need for sound infrastructure, and we are pleased to be able to support this growth while delivering solid long-term, risk-adjusted returns for the CPP Fund.” The fund has been investing in India since 2012.
Christian Fingerle, Allianz Capital’s CIO, called infrastructure a “key driver” of India’s economy. He also praised the fiscal and legal policy framework that helps make those investments attractive to long-term investors. Allianz Capital Partners has approximately $27 billion in assets under management.
In addition, IndInfravit will be listed on the National Stock Exchange of India Limited and BSE Limited. The investment board and Allianz Capital will also take board positions on the investment manager. Both plan to make future investments in Indian road infrastructure.
The Canada board has also entered a joint venture with Singaporean sovereign wealth fund GIC ($359 billion) to buy a Grade A office building in Seoul for 418 billion Korean won ($387 million).