She stresses that while India and China have experienced some level of liberalisation, the two markets are quite different. “The private sector is playing an increasingly greater role in the Indian economy, including infrastructure. Several ports, airports, airlines [and] telcos are owned by the private sector,” she says. “China is more state-controlled, with almost all infrastructure owned by the state, either wholly or substantially.” According to the AMP Capital report, the Indian Government aims to attract a 30 per cent contribution in funding from the private sector for new infrastructure development. Investment opportunities are most likely going to be in the energy, telecommunications and transportation sectors. The report also anticipates the Chinese Government will seek private-sector investment to support the sheer scale of the infrastructure program planned for the country’s vast population. AMP Capital reckons this will manifest as a mix of “directed” investments made by local insurance and pension funds at the behest of the government. But some of these deals may also be open to foreign investors.
QIC has been investing in India through its specialist fund since 2007. It has focused on making equity investments in infrastructure or infrastructure-related facilities and projects. As such, it has targeted Indian companies in high-growth sectors such as transportation, logistics and telecommunications – all of which are underpinned by infrastructure. “The underlying investments have qualities which characterise them as infrastructure, such as providing essential services, low elasticity in pricing and a strong competitive position – similar to our other infrastructure investments,” says Papathanasiou. “However, given India is an emerging high-growth economy, these companies have greater needs for expansion capital than their developed market counterparts, and the fund has typically provided capital to enable the companies to fund their expansions.” Overall, however, QIC is principally a core and occasionally core-plus infrastructure investor and seeks investments in lowerto medium-risk infrastructure, which includes developed markets utilities, transport assets and social infrastructure. “We have less appetite for emerging-markets investments, greenfield opportunities or assets that operate in highly competitive markets,” said Papathanasiou. QIC has committed about 4 per cent of its clients’ infrastructure allocations to the India-focused fund.