Some of the leading asset owners and managers from around the world will gather in November in India for what its U.S.-based organizers call a “deep dive” into the country, to figure out the promises and risks of investing in India, first-hand.
The Pacific Pension Institute or PPI, organizers of the event, is a platform of 111 pension funds, endowments and sovereign funds from around the world that collectively have $ 15 trillion in assets.
‘Looking at various sectors’
“We will be looking at various sectors, the geopolitical situation, India’s position in the global economy and the neighbourhood,” Lionel C. Johnson, president, PPI, told The Hindu in an interview. PPI is partnering with SEBI, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) for two separate but complementary events, the executive seminar and the Asia Round-table, between Mumbai and New Delhi, from November 5 to November 10.
The investors are scheduled to meet Prime Minister Narendra Modi, Finance Minister Arun Jaitley and other Union Ministers, Chief Ministers, and leaders of Indian banks and corporations. All interactions will be under a ‘no marketing policy’ and non-attributable, to ensure candid conversations, he said.
‘Deep dive’ into India
“The executive seminar will have 20 of our asset owners, CEOs or active trustees of major pension funds coming for a deep dive into India. To see for themselves what are the drivers — people are keen to know in greater detail, what are the opportunities, the challenges,” Mr. Johnson said.
“The highlight of the meeting will be the meeting with PM Modi. It is a group that is keen to hear from the Prime Minister and his Ministers about the long-term opportunities for investments in the country. Infrastructure is one of the priorities of the government. Other sectors that our investors appear to be keen include IT, agriculture, and health services. We are excited about this opportunity to interact with the PM,” Mr. Johnson said.
‘A large focus’ for the group
PPI was founded in the wake of the 1997 Asian economic crisis and its membership now is spread across Europe, North America, South-East Asia, New Zealand and Australia. The sovereign fund of the UAE is also a member. Mr. Johnson said India is a large large focus for the group at the moment. “A lot of the PPI members have been to India, and have experience in India to varying degrees and we thought it was timely to take this group to India and see firsthand what is happening,” he said. “A lot of good things are happening in India under the current leadership, which is trying to make it more hospitable to FDI, particularly long-term.”
According to Mr. Johnson, the participants at the events will have an open mind, but they are primarily “conservative investors who have a very long-term view, but also very concerned about risks.” “Some of our members are really very bullish, some are risk-averse. Most people are in the middle. It is my job to give them all a balanced perspective, the wonderful aspect and the more challenging parts of it,” he said.
Awed by growth trajectory
Mr. Johnson said relative to other Asian economies, India’s growth trajectory is very impressive and the demographic promise of India is really attractive — “the build-up of a middle class, consumer economy, the prospects for the transition of the agriculture sector, an expanding private sector.”
For the investors, it offers long-term growth and returns but many fund managers tend to place India lower in their calculations, “not because it is less hospitable, but there is less understanding,” Mr. Johnson said. “India’s population is almost the same as China and India’s demography is more attractive — that is what the investors need to understand about India and it is happening already.”
Needed: sophistication to do business
Mr. Johnson has said the investors are keen to hear about banking, government’s efforts to privatise key sectors such as aviation and entities such as Air India and expand the infrastructure. Given the large diversity in India’s economic ecosystem, international investors have to be very sophisticated to do business in India.
“It is not a monolithic environment,” he said adding that interactions with Chief Ministers would offer PPI members an opportunity to understand this. He said despite the initial hiccups in the implementation, PPI members were seeing GST as, “in the long term… a good idea” that “creates a predictable environment.”
