Canadian firm, Edelweiss to invest ₹5,000 cr in stressed assets

MUMBAI: 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 ₹5,000 crore in stressed assets and private debt in India over the next four years.

CDPQ will also acquire a 20% equity stake in Edelweiss Asset Reconstruction Company (ARC). Edelweiss ARC has around ₹30,000 crore in assets. CDPQ held $254.9 billion in net assets as of June 30, 2016.

“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 ₹12,000-14,000 crore, which includes CDPQ’s 5,000 crore and the investments by 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 the 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,” said Rashesh Shah, CEO, Edelweiss Group.

Edelweiss Financial Services shares closed 8.5% up at ₹122.90 on the BSE.

State Bank of India and another Canadian firm Brookfield Asset Managementalso recently launched a joint venture to purchase distressed assets.