(Bloomberg) – ANZ Group Holdings is in talks with an Australian pension fund to invest in India’s infrastructure assets and debt markets, a bank executive said.
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“We are currently in discussions with several Australian pension funds to bring it to India,” Mark Whelan, the bank's institutional group executive, said in an interview in Mumbai. “We are considering establishing a comprehensive business relationship with them.”
Mr Whelan did not name the fund, but said ANZ would assist pension funds by identifying suitable assets and acting as an intermediary to connect them with potential investment opportunities.
India's infrastructure sector requires large amounts of capital, but Australian funds are looking for investment opportunities around the world as domestic options are limited. India's ruling party has promised to prioritize infrastructure development in its campaign manifesto as Prime Minister Narendra Modi seeks a third term in elections that began on Friday.
Infrastructure spending in the South Asian country is expected to double, reaching nearly 143 trillion rupees ($1.7 trillion) in the next seven fiscal years until 2030, according to a report by Crisil Ratings. This presents an opportunity for Australia's A$3.7 trillion ($2.4 trillion) pension industry, the world's fourth largest. Its assets are expected to more than triple to A$13.6 trillion by 2048, according to a Mercer report.
Furthermore, Indian government bonds are scheduled to be included in JPMorgan Chase's flagship emerging market bond index from June, making them an attractive investment vehicle.
“Investing in government bonds through the overseas portfolio route is an attractive investment for Australian pension funds, as Indian sovereign securities offer between 7 and 7.50 per cent,” Mr Whelan said. He added this was an opportunity for Australia's large pension funds to deploy capital.
He said ANZ had doubled its capital base in India to A$600 million in the past two years.
ANZ Group CEO Shane Elliott told Bloomberg last month that the company aims to grow its presence in India as customer needs change with changing global trade patterns. Ta. The strategy also includes reducing its positions in banks in Malaysia, China and Indonesia.
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