If we look back at the evolution of the Canadian Pension system, we were similar to the Indian Pension funds. We invested only in our home market and mostly in liquid markets with external managers. This approach has evolved and now it is considered standard practice for institutional investors to have a significant share of their funds directly invested in less-liquid assets – such as private equity, infrastructure and real estate – for the purposes of diversification.

In India, the domestic pension funds have traditionally invested in government paper and highly rated corporate debt, rather than direct investments in private equity or infrastructure. There has been quite a lot of discussion on whether the Indian Pension funds can follow the example of Canada or Australia to channel a portion of their long-term funds into direct investments in infrastructure for instance.

As a long-term investor that manages funds for public pension plans, we at CDPQ are always cognizant of whose money we are investing. We believe that the best way to meet the needs of our 41 clients is to invest in projects over a long-term horizon alongside like-minded partners and management teams, and we’re committed to investing in the growth of our portfolio companies. Simply put, our approach is to build businesses that generate consistent returns. The risk-adjusted return over the life of an investment is what we focus on.

Globally, we look across our asset classes and identify sectors where we wish to be present. In India, we are particularly active in financial services, logistics and renewable energy, and we have an appetite for technology-enabled consumer services and healthcare. A good example is what we’re doing through our partnership with leading solar power developer and operator, Azure Power. As one of the largest players in the rapidly growing renewable energy industry in India, Azure Power is well-positioned to take advantage of this growth and has a target to increase its portfolio capacity to ~350 GW by 2030. Since our initial investment in 2016, we have supported our partner by reinvesting at various stages of its growth over time. Our strategic partnership with Azure Power is well aligned with our own investment strategy to address climate change, which includes a 25% decrease in the carbon intensity of our global portfolio between 2017 and 2025. We also invest in companies with a more traditional profile, and who are in the process of a digital transformation or take steps towards cleaner energy sources.

We are still navigating a lot of uncertainty worldwide, as no one can predict the full impact of the COVID-19 pandemic. In that regard, India is also still struggling with the impact of the virus on businesses as well as on people’s lives. Factors such as India’s favorable demographics, entrepreneurial drive, quality of management, digitization, and institutional and regulatory stability continue to make India a priority investment destination for CDPQ. Several of the policies that have been put in place, such as the Bankruptcy Code, GST, RERA, will benefit the country. Faster execution and stability in regulations and in the interpretation of these policies would be key.

Globally, CDPQ seeks reliable returns over a long investment horizon, and as such, we do not let short-term market fluctuations and speculation impact our investment decisions. In the midst of the COVID-19 crisis, we took several concrete actions, including an in-depth review of all portfolio assets, to identify sectors of the future and potential risks, in order to better define the post-COVID 19 strategy.

A third area that requires working much harder than average is executing something which has never been done before. I thrive on thinking through unconventional solutions and working with people to implement such ideas. New ideas are scary, they challenge the status quo and tend to change the way business is done. To bring about such change one has to work harder to make sure that all the details have been thought through and that the net impact is positive. While the perceived risks are higher, the returns are also higher.

Just as an example, we recently obtained the EDGE Certification, a leading global assessment in gender equality. We’ve also championed diversity and taken actions to positively influence the industry, our partners and the companies in our portfolio through different international associations and alliances. Our commitment translates to all levels of our organization. Much progress has been made in recent years, but we know there is still a lot of work to do. And we are looking forward to doing our part.

In my own team, I have been proud to promote greater diversity, both in terms of gender and culture. We have almost a 50:50 gender diversity and a good representation of people from all over the world. The key is to search for the best talent and not the same type of talent. A diverse team contributes with ideas and approaches that are innovative and successfully execute them due to a shared passion and commitment, which is found in a close-knit team where each contribution is valued.

When I am told that we do not have a pipeline of diverse candidates in the industry, I think it may be a cop-out. We have to create the pipeline, we have to nurture talent, we have to go the extra mile and work harder to find diverse candidates. Once you manage to attract diversity, it is also very important to support and foster it through inclusion. It is very easy in a dominant culture to get sidelined or to feel different. It is leadership’s role to make sure that we set the tone from the top by valuing and growing diverse talent. What I have learned is that the whole team rises to a higher bar of thinking, creativity and execution.