The Canada Pension Plan Investment Board (CPPIB) has invested RMB 3.2 billion ($500 million; €458 million) in the common equity of Postal Savings Bank of China (PSBC).
Other known strategic investors alongside CPPIB are JP Morgan, DBS Group, UBS Group, Temasek Holdings, the International Finance Corporation, state-owned enterprises China Life and China Telecom, and internet companies Tencent and Alibaba affiliate Ant Financial.
PSBC raised RMB 45.1 billion in new shares in the largest equity deal by a Chinese financial institution in the last five years, according to a statement.
PSBC has more than 400 million retail customers and 40,000 branches across China and a deep rural depositor-base. It is China’s largest bank by customers and distribution network and is the sixth largest bank by total assets in China. The bank is reportedly seeking to raise $10 billion in an initial public offering on the Hong Kong Stock Exchange next year.
“We welcome the opportunity to invest in Postal Savings Bank of China as it is a business that is well suited to CPPIB’s long-term investment horizon,” said CPPIB president and Mark Wiseman.
“China is an important market for a long-term investor like CPPIB and we view this investment as a great opportunity to work alongside a highly respected financial institution to participate in the future growth and rising consumption patterns of the Chinese population.”
The past year has seen a wave of deals by the Canadian fund in areas such as logistics, warehousing, retail real estate and private equity buyouts.
In September, CPPIB joined a consortium led by South Korean private equity firm MBK Partners to acquire Tesco’s interest in Korean retailer Homeplus Group for $6 billion, as reported by Private Equity International.
In August, CPPIB invested C$170 million into a joint venture with Malaysia’s Pavilion Group to develop a mixed-use luxury complex in Kuala Lumpur.
The pension fund has also continued to invest in China’s real estate market partnering with Vanke Co early this year.
As at 30 September 2015, the CPPIB Fund totaled $272.9 billion.