Canadian pension fund Ontario Teachers’ Pension Plan Board has tied up with Edelweiss Alternate Asset Advisors Ltd for a private debt platform that aims to invest $350 million (Rs 2,600 crore) in India.
The long-term partnership will focus on “performing and distressed private credit investment opportunities” in India, the two firms said in a statement.
Edelweiss Alternate has four existing funds which invest in performing credit, distressed assets and infrastructure. Last year, Edelweiss India Special Assets Fund II raised $1.3 billion for distressed assets investments and secured another $360 million for its infrastructure yield plus fund.
The Canadian firm has committed the capital for performing credit and distressed private credit investment opportunities in India. Its investment will be across these two strategies and will be a commitment to funds managed by Edelweiss Alternate.
“The need for long-term patient capital in India presents a huge opportunity for private debt managers,” said Rashesh Shah, chairman of Edelweiss Group.
The deal comes soon after Edelweiss Financial Services Ltd, the group’s Mumbai-listed flagship company, itself signed a private credit deal with Hong Kong-based alternative investment firm PAG this week.
The Ontario Teachers’ deal follows a growing trend amongst global private investors, who are shifting their private credit investments into a fund model from the struggling non-banking finance company (NBFC) model.
Most global investors have burnt their hands setting up NBFCs for corporate lending. Edelweiss’s own NBFC, ECL Finance Ltd, sold its corporate loans at a haircut to Ares SSG last month. Canada Pension Plan Investment Board also struck a private credit deal via a fund format by investing in Bain Capital and Piramal Group’s India Resurgence Fund last year.
Gillian Brown, Ontario Teacher’s senior managing director for capital markets, said that this partnership would expand its presence in India and provide additional insights into the Indian market.
“This is an important milestone in our ambition to build multi-asset class exposure to India’s long-term growth story,” said Ben Chan, regional managing director for Asia Pacific at Ontario Teachers.
Ontario Teachers had roped in Ben Chan, a former top executive at Malaysian sovereign wealth fund Khazanah Nasional Berhad, as its Asia-Pacific head in March 2018.