Canadian Pension Dollars Bound for Delhi

(September 24, 2013) — Pension funds in the Great White North are keen to send some of their assets to the east, a Canadian envoy to the region has told diplomats.

Canadian High Commissioner Stewart Beck told Indian officials that his country had some of the world’s strongest pension funds and they wanted to invest in the burgeoning economy, Indian newspaper the Economic Times reported.

“Last week, representatives of five largest Canadian pension funds were in India to talk about how to bring Canadian capital in this market,” Beck said. “Those five funds alone represent around C$700 billion of investible capital.”

India has been one of the emerging market success stories of recent years, showing a phenomenal growth rate and increasing productivity. Over the past couple of months the impetus has stumbled and consensus forecasts for future growth have been cut by observers around the world.

That said, the Goldman Sachs forecast of a 4% Indian growth rate for 2013 outshines Canada’s own. In 2012, the nation’s GDP grew just 1.7%. India grew by 3.2% over the same period. The nation also has a growing middle class and a young workforce that will, it is predicted, spur the economy back to its former strength.

Beck cautioned, however, that Canadian investors were concerned with the “layers” of tax in India. They were not against paying tax, he clarified, but they were concerned with the very technical nature of the system.

These funds were seeking an 8% to 10% return from potential regional investments and “as long as one can have that in a relatively risk-free environment, I see a good future in India,” he said.

Areas of interest for Canada’s pensions could include food security, energy security, education, and infrastructure.

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