CPPIB Buys Stake in Top India Logistics Provider

One of Canada’s biggest pension funds is growing its exposure to India’s logistics sector.

The Canada Pension Plan Investment Board has invested $115 million in Delhivery Pvt Ltd., one of the country’s largest third-party logistics providers. The business operates in more than 2,000 cities and offers a broad range of supply chain services including parcel transportation, warehousing, freight, reverse logistics, cross-border, and technology services.

“This investment in Delhivery builds on our Fundamental Equities Asia group’s strategy to provide strategic capital to high-quality companies in the region,” said Senior Managing Director and Global Head of Active Equities Deborah Orida, who stressed the importance of supporting the investment opportunities generated by the “continued strong growth of e-commerce.”

The plan invested in Delhivery through its fundamental equities group, which researches and makes long-term investments in Asian corporations. The fund will also have a seat on Delhivery’s board.

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“CPPIB has been active on the ground in India for nearly a decade and we continue to pursue opportunities to invest in the country as part of our focus on emerging markets,” said Alain Carrier, the fund’s senior managing director and head of international. He said Delhivery’s reputation “fits well” with its sights on supporting “high-growth businesses.”

The fund’s India-based equity investments were C$9.9 billion ($7.5 billion) as of June 30^th. It returned 8.9% in fiscal 2019, growing the fund to $290.9 billion.

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Tags: Canada, Canada Pension Plan Investment Board, India, logistics, Pension

Denmark’s Magistre & Psykologer (MP) Pension has dumped 10 of the world’s biggest oil firms, continuing its green investment goals.

The 10 companies the plan excluded are ExxonMobil, BP, Chevron, PetroChina, Rosneft, Royal Dutch Shell, Sinopec, Total, Petrobras, and Equinor.

“MP Pension wants to take responsibility for the green transition and secure the members’ long-term return,” the fund said in regards to the ESG divestment.. The $20 billion plan said it removed the 10 companies because MP believes that the oil firms’ long-term business models are not compatible with the goals of the Paris Agreement, which seeks to reduce the world’s carbon footprint as a means to stave off climate change.

Last year, the plan’s board of directors decided to sell shares in oil, coal, and tar sands companies if MP deemed their goals to be unaligned with the Paris Agreement. Companies that are cooperating with the Paris goals are exempt from being divested. The pension has given itself until 2020 to decide which companies will be sold.

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“We must assess over 1,000 oil companies by the end of 2020. That is why we have had a special focus on the world’s ten largest oil companies. The total market capitalization of these ten companies exceeds DKK 9,200 billion. MP’s share in the ten companies amounts to DKK 644 million ($95.3 million). This corresponds to 2/3 of all MP’s equity investments in oil,” said Anders Schelde, the fund’s chief investment officer.

“In the MP’s estimation, all this data shows that the ten companies are not and cannot be compatible with the Paris agreement by the end of 2020. Of course, we have considered whether we should wait to sell the shares until 2020, as there can be a positive turnaround. But we would rather draw a line in the sand now that we do not believe in this context that we can influence the companies further by the end of 2020, ”said Schelde.

Should their practices improve, MP could eventually reinvest in the companies.

“We hope that these ten companies will take the green transition much more seriously and that they will take on a much greater responsibility to convert their businesses into renewable energy. When they hopefully have done so, we would very much like to invest in the same companies again. But it requires a significant change in all ten companies, ” Schelde said.

Other Danish funds have divested from coal, tar sands, and oil recently. In July, $17 billion PenSam added 26 more oil firms to its exclusion list, which also adheres to the Paris Agreement’s goals.

Tags: Denmark, Divestment, ESG, MP Pension, oil and gas, Pension