$42 bn UN pension fund scouts for investment opportunities in India (Lead)

February 15th, 2011 - 5:54 pm ICT by IANS  

Sensex By Devirupa Mitra
New Delhi, Feb 15 (IANS) In a boost for Indian stock markets, the United Nations is looking to ramp up the India portfolio of its $42 billion pension fund with more investments, especially in private projects in infrastructure and real estate.The members of the investment committee of the United Nations Joint Staff Pension Fund (UNJSPF), an expert group that advises on where to invest pension funds, were in India last week and held a series of meetings with asset management firms here.

“We are looking more strategically at diversification of our investments, particularly in emerging markets and specifically with regard to more opportunities the fund could take advantage of here,” said Warren Sach, the UN secretary general’s representative for investment of UNJSPF assets.

He pointed out that India has bright prospects for sustained growth, based on factors like demography and growth of the working population.

“The younger age profile than what China has gives us some confidence that the Indian economy is not just going to grow but probably end up growing as fast as, if not faster than, China. That makes it very interesting for us,” Sachs told IANS in an interview during a visit here.

The official said the diversification was also partly necessitated by the financial crisis since 2008 and the resultant market crash, due to which the portfolio fell to as low as $27 billion, even though the Indian markets held their ground.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange had finished 2010 with a gain of 3,044.28 points, or 17.43 percent, over the previous year’s close. In contrast, it was a mixed year for other Asian indices during 2010.

Japan’s Nikkei fell three percent, Hong Kong’s Hang Seng ended 5.3 percent higher, South Korea’s Kospi finished 22 percent ahead, Jakarta’s JSX logged a 46 percent rise and Thailand’s SET Index was up around 41 percent.

These apart, Singapore’s Straits Times Index ended with a more than 11 percent gain, the Philippine bellwether ended around 38 percent higher and Malaysia’s Bursa had ended 19.3 percent up.

At the end of last year, the fund’s Indian assets were valued at $419 million, of which $346 million was in equities. The Indian portfolio includes $58 million in Infosys and $42 million in ICICI.

“We have some investments in publicly quoted securities… We are prepared to look at private equity opportunities for infrastructure investments and also in the real estate field,” said Sach.

The biggest proportion of the fund’s assets are parked in North America, which accounts for 37 percent. Emerging markets account for 14 percent, which has increased over the years - and Sachs suggested that it would expand further.

Sach said the fund was already ahead of the global benchmark of Morgan Stanley Capital Index and wanted to perform better as part of the diversification programme and take advantage of the growth opportunities in emerging economies like India.

The UNJSPF investments committee held its meeting here last week and also interacted with the top honchos from a host of asset management companies, including those of Asahi Glass, Hero Honda group, Avantha group, as also media company Network 18.

Last year, the committee had gone for a similar exercise to China, where it has pumped in over $1 billion. After India, they will be looking at a whole continent in 2012.

“Probably we’ll do a similar exercise like this in Africa next year,” said Sach. The fund, incidentally, was named the “Institutional Investor of the year 2010″ as part of the Africa Investor Investment and Business Leader awards.

(Devirupa Mitra can be contacted at devirupa.m@ians.in)

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