Recent Additional Commitment To Canadian PE: $335M
Total Commitment To Canadian PE: $1.7B
Total Commitment To PE: $8.4B
Total Reserve Fund Size: $91.7B (As of 09/30/2005)
In a move proving there is confidence that the Canadian private equity market is maturing, the CPP Investment Board committed $335 million to a Canadian private equity program that will be invested and managed by TD Capital Private Equity Investors. Approximately $210 million has been committed to a Canadian small and middle market buyout fund-of-funds and about $125 million has been committed to a Canadian venture capital fund-of-funds.
The commitment from the Toronto-based investment board is a testimony to its bullish outlook on Canadian private equity, according to Mark Wiseman, vice president of private investments for the CPP Investment Board. While the board does not have any mandate to focus on or give preference to Canada-based funds or fund managers, Wiseman says that being Canada-based gives them a knowing perspective and faith in Canadian markets.
“Being in Canada we obviously have a petty good understanding of the smaller end of the Canadian markets in both buyouts and venture capital and we’re pretty bullish on those markets,” says Wiseman, who served as the leader of the private equity fund and co-investment program with the Ontario Teachers’ Pension Plan before joining CPP this past June.
CPP is building a co-investment program similar to ones at the Ontario Teachers’ Pension Plan and the Ontario Municipal Employees Retirement System (OMERS). Wiseman set up a group to start making co-investments in private equity and says that CPP will become more visible over time on co-investment deals. So far the program has made four co-investment deals over the past four months.
“You should expect to see us over time become more active as a principal investor,” adds Wiseman. “As we build out our capabilities we’ll do larger and more complex transactions. We’re going to start slowly and evolve. I hope it won’t be a Darwinian, slow evolution. I hope it will be a rapid evolution.”
The CPP Investment Board has committed a total of approximately $8.4 billion to private equity, with about $1.7 billion of that going into Canadian private equity. This makes the CPP Investment Board one of Canada’s largest private equity investors. As of the end of September, the CPP’s reserve fund had $77 billion. Private equity firms that the CPP has invested in include the Carlyle Group, EdgeStone Capital, MidOcean Partners, Paul Capital, Thomas Weisel and Veronis Suhler Stevenson.