Ardian, Blackstone take down $1 bln-plus PSP portfolio

  • PSP one of numerous sellers on secondary market
  • Ardian acquired the bulk of the large portfolio
  • Sales driving secondary volume to record levels

Ardian is buying the bulk of a large portfolio of private equity stakes shopped by Canadian institution Public Sector Pension Investment Board, while Blackstone Group’s secondary team is picking up a few individual fund interests from the sale, sources told Buyouts.

The PSP portfolio is one of numerous large LP deals in the market since last year that have helped boost the secondary market to record deal volume levels of more than $70 billion, according to recent surveys.

Ardian and Blackstone’s Strategic Partners are the buyers of the PSP portfolio, valued at around $1.3 billion, sources said. PSP declined to comment.

The system, with about C$153 billion ($113.5 billion) of assets as of March 31, 2018, is no stranger to the secondary market. It sold a portfolio valued at about $1.5 billion in 2013, and one in 2010 that generated proceeds of more than $800 million, Buyouts reported.

PSP over time has been moving into more direct investing and away from passive fund investing.

Guthrie Stewart, PSP senior vice president and global head of private investments, was hired in 2015 to overhaul the private markets operation.

In fiscal 2018 ended March, private equity co-sponsorships and co-investments made up more than half the system’s portfolio from around 40 percent in 2015, Buyouts reported.

PSP commits capital to more than 30 GP teams, a number that will likely expand, Buyouts reported.

A flurry of portfolio sales hit the market toward the end of 2018 in a market with strong pricing. The average high secondary bid for all funds was 92 percent of net asset value in 2018, a 100-basis-point decline from 2017, Greenhill Cogent said in its full-year 2018 secondary-volume report.

CPPIB bought a portfolio of PE stakes valued at about $1.7 billion from OTPP; Goldman Sachs was lead buyer of a $1.3 billion PE portfolio from CDPQ; Blackstone acquired an about $1 billion portfolio of PE stakes from LACERA, and Ardian bought a $1 billion portfolio from Florida SBA.

Greenhill Cogent, Evercore and Setter Capital all estimated total secondary volume in 2018 at more than $70 billion — a record tally for deal activity.

Action Item: Check out PSP’s annual report here: