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CDPQ assembles powerhouse operating team to support direct deals

CDPQ's global operating team is led by AJ Rubado, formerly with Reservoir Capital and KKR, and Lorenzo Levi, formerly with Terra Firma Capital Partners and Apollo Global Management.

Caisse de dépôt et placement du Québec added the final members to a global operating team set up to aid the pension system’s pivot to direct investing.

CDPQ is expected to announce the hire of Laila Worrell as operating partner, private equity. She joins from Altran Americas, a digital design and engineering business, where she was CEO. Worrell took the job in 2018, following Altran’s acquisition of Aricent from KKR. She was previously Aricent’s COO.

Worrell’s recruitment comes on the heels of two others. CDPQ last year brought on Yue Du, formerly a director and operating partner with Hony Capital, and Ralph Friedwagner, who held the same roles at Montagu Private Equity. Worrell will work in CDPQ’s office in New York, while Du and Friedwagner are based in Singapore and London, respectively.

The hires complete a process begun by CDPQ three years ago to assemble a high-powered team of senior executives with PE backgrounds to assist the ramp-up of direct dealmaking. The operating partners, who now total eight, are expected to be involved in all facets of investment, not just post-closing portfolio oversight.

Leading the team are AJ Rubado and Lorenzo Levi, managing directors and operating partners, private equity. New York-based Rubado joined in 2018 from Reservoir Capital, where he was a managing director. Before, he was a director in KKR’s operating group, KKR Capstone.

Levi, based in London, came onboard in 2019. He was previously a managing director with Terra Firma Capital Partners and an operating partner with Apollo Global Management.

Rubado’s and Levi’s team, active in North America, Europe and Asia, also include Benoît Raillard, formerly with GIMV; Justin Shaw, formerly with Cerberus Capital Management; and Jeff Smith, a one-time executive with KKR Capstone.

Montreal-based CDPQ, which has C$365 billion ($304 billion) in assets, overhauled its PE strategy in the past decade. The biggest change was a reweighting of the portfolio toward direct investing, from a prior emphasis on funds. Today, more than 75 percent of assets reflect co-sponsorships and co-investments.

Much of the shift happened under CDPQ’s ex-PE head Stephane Etroy, now with Ares Management. Etroy focused on committing money to select fund partners who could introduce CDPQ to attractive deal flow in sectors like financial services, healthcare and tech. He also encouraged doing deals with non-fund partners, such as corporations, entrepreneurs and institutions.

In a 2018 interview with Buyouts, Etroy said he would grow the size of PE teams globally and add new capabilities to make CDPQ an effective, value-adding investor. This aim appears to have been furthered by Etroy’s successor, Martin Laguerre, named head of private equity and capital solutions in 2020.

CDPQ’s bet on direct investing obtained some validation last year, Buyouts reported. The PE portfolio generated a net return of 20.7 percent against a benchmark of 9.9 percent, the health crisis notwithstanding. As a result, assets expanded to C$64 billion.

CDPQ’s latest direct investments include Druva, a cloud data protection and management business. Announced in April, the $147 million deal was led by the pension system with participation from Neuberger Berman, Viking Global Investors and Atreides Management.