The Hindu Business Line : CalPERS invests $100 m in India

THE California Public Employees' Retirement System (CalPERS), the leading US pension fund, has invested about $100 million in the Indian equity market in the current fiscal. The total fund invested in emerging markets by CalPERS is around $2 billion.

The CalPERS Vice-Chairperson, Investment Committee Trustee, Ms Priya Mathur, who is currently in India, said the investment by the fund is mainly in information technology, pharmaceuticals and manufacturing sectors. She, however, declined to divulge the names of the companies.

In April 2004, CalPERS had announced its plans to invest in India. The pension fund was registered with SEBI as an FII in July this year.

At the time of announcing its decision to invest in India, CalPERS said India had progressed well on reforms in the securities market especially in moving towards T+2 settlement.

Speaking to reporters at a capital market conference organised by the FICCI here on Tuesday, she said the pension fund was optimistic on emerging markets. When asked how much funds CalPERS had earmarked for India, she said, "no specific fund has been allocated to India as yet. India is a new country for us".

Ms Mathur said the minimum time frame for investment is three years while normal investment time frame is 10 years.

Asked on the investment decision for emerging markets, she said, "CalPERS has three fund managers for emerging markets and they decide which country to invest in".

CalPERS has no plan to invest in Indian debt market, she said. "Debt market in India is yet to develop," she said.

Earlier, in a panel discussion on trends in global capital market, she said valuations in Indian equity market were competitive.

India ranks top on CalPERS ratings in terms of trading infrastructure, regulations and movement towards T+2 rolling settlement, she said.

Meanwhile, several other global fund managers are bullish on the Indian equity market, especially on the mid-cap stocks.

However, their biggest concern is the illiquidity in these stocks.

Ms Hazel McNeilage, Managing Director (Asia), Principal Global Investor, Singapore, said foreign investor interest in India now is in mid-cap stocks.

The liquidity in these stocks is very low due to significant amount of family ownership in some of these companies, she said.

The HSBC Global Head Investment Banking, Mr Robin Osmond, suggested that, in order to improve liquidity in mid-cap stocks, the families could dilute their stake in these companies. Such a move could see more funds getting attracted to India.

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