Stephane Etroy stepped down as executive vice president and head of international private equity at Caisse de dépôt et placement du Québec, a role he held for more than two years.
Etroy will be replaced by Charles Émond, who joined Montreal-based CDPQ in February from Scotiabank to work as an executive vice-president.
In a statement, CDPQ said it will take the opportunity of the leadership change to reorganize all PE activities at home and abroad under Émond, who will combine his prior Quebec and strategic planning responsibilities with oversight of global PE operations.
The reorganization will allow the pension fund to benefit from the integration of PE personnel and resources and share best practices, CDPQ said.
Etroy, recruited in 2015 from Charterhouse Capital Partners, left to spend more time with his family in London, CDPQ said. His departure comes a week after the announcement that Michael Sabia, CDPQ’s president and CEO for almost 11 years, will leave in early 2020.
CDPQ, Canada’s second largest pension fund with C$327 billion ($247 billion) in net assets, is one of the world’s biggest investors in PE. Operating from offices in Montreal, New York, London and Singapore, its PE team deployed more than C$9 billion in the global market in 2018, ending the year with net portfolio assets of nearly C$43 billion.
CDPQ has been steadily shifting its PE focus to solo deals, co-sponsorships and co-investments, a process Etroy facilitated during his tenure. Last year, direct investing accounted for three-quarters of PE portfolio activity. Less than a decade ago, fund commitments drove the strategy.
Etroy told Buyouts in a 2018 interview the reweighting reflects the outperformance of direct investing relative to funds over time. Overall, PE investments generated a net return of 16.6 percent last year, exceeding a benchmark of 8.7 percent.
CDPQ has nonetheless continued to increase commitments to core PE fund partners that provide it with access to deal flow, strategic opportunities, and specific markets. Examples include Altas Partners, Ardian, Blackstone, CD&R, CVC Capital Partners, KKR and Silver Lake.
CDPQ has also expanded deal partnerships with non-fund investors.
Action item: See Charles Émond’s biography here.