CPP Investments' Agus Tandiono on Asia's next big investment trends
Canadian pension fund CPP Investments manages over C$632 billion (US$463 billion) in assets, having achieved an 8% increase in AUM at the end of the 2024 fiscal year — and Asia features prominently in its portfolio.
"Asia represents about 21% of our global investments, at around C$133 billion. Our focus is on three of the largest geographic areas by AUM: Greater China, Japan, and India," Agus Tandiono, head of Asia Pacific, said at AsianInvestor's 19th Asian Investment Summit last week.
Tandiono maintains a positive outlook for Asia and said there are significant opportunities in the region’s burgeoning economies and technological advancements. He also shared the fund's key investment trends and approach to co-investing, highlighting its commitment to long-term, diversified growth.
A DIVERSE APPROACH
CPP Investments’ strategy hinges on capitalising on key trends shaping the region.
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CPP Investments
"Ever since opening our Hong Kong office in 2008, we've been investing based on urbanisation, consumption growth, and the growth of technology. We learned a lot and performed very well, capitalising on these trends in China. Now, we're taking those lessons and applying them to India and Southeast Asia," said Tandiono.
He emphasised the fund’s multi-pronged approach, engaging in early-stage investments through private equity and debt while proactively developing assets in underserved sectors.
"For some companies in India and Southeast Asia, we'll come in very early, investing through private equities and private debt. If a sector lacks the specific assets we want, we'll build them from scratch,” said Tandiono.
“For example, we've been building data centres and logistics warehouses in India to capture future growth."
Beyond bricks and mortar, CPP Investments recognises the transformative power of technology.
"Technology is another key investment trend for us," he said.
"In Asia Pacific, we have regional winners and global champions right in our backyard. When I joined CPP in 2014 to 2015, our analysis showed that some of the best global champions, like TSMC, Samsung Electronics, and HYNIX, were right here."
"We've been investing in some of those companies since 2015. With the growth of AI and the need for GPU computing, that trend will only continue."
SEEING GREEN
The Canadian fund is not just focused on economic growth — sustainability is central to its investment philosophy.
"Investing globally in the energy transition is critical," said Tandiono.
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The fund is actively engaged in supporting the shift towards a greener future: investing in renewable projects through infrastructure and sustainable energy, as well as the electric vehicle supply chain, batteries, and energy storage.
“We're also helping traditional energy companies transition to green energy. These are all areas we're actively investing in and evaluating," he said.
TRUE PARTNERS
CPP Investments leverages co-investment as a key strategy to enhance returns and deepen relationships with partners.
"Many funds and asset owners allocate capital to private equities and stop there," Tandiono explains. "But we have a dedicated team ready to handle co-investments, which is also very important."
This dedicated team allows the fund to participate in larger deals alongside private equity firms, often exceeding the initial fund allocation.
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"For example, if a private equity firm has a large deal and the fund is only taking 20% or 50%, we might co-invest in the remaining 50% if we like the deal," says Tandiono. "We'll write another $100 to 200 million check, which enhances the return on that relationship."
This approach also provides several additional benefits.
"The fees aren't as high, there are additional returns, and we tell all our partners that we will evaluate them not just on their fund returns, but on how else they can help us scale our investments and generate excess returns," Tandiono elaborates. "Then we group them together and evaluate them."
By actively engaging in co-investments, CPP Investments maximises returns while fostering strong partnerships that contribute to their long-term success.