The CPP Investment Board (CPPIB) has committed to a co-investment of private equity fund assets with U.S. secondary firm Paul Capital Partners. The two groups are teaming up to buy a portfolio of secondary interests, primarily U.S. buyout funds.
The CPPIB will commit $120 million to CPP Investment Board-Paul Capital Holdings II, a $310 million limited partnership that will be managed by Paul Capital Partners and acquire the secondary portfolio.
The Toronto-based CPP Investment Board was founded in 1997 and has a total of $4.56 billion committed to 42 limited partnerships in 36 private equity firms. Secondary firms comprise about 17.5% of the CPP Investment Board’s private equity portfolio. The total Canadian Pension Plan portfolio has about $49 billion under management and expects to allocate up to 10% of its total portfolio in private equity.
For the Canadian Pension Plan the announcement was a sign that the departure of Mark Weisdorf, who resigned this past December, had not diminished its dedication to private equity. Weisdorf authored the investment board’s private equity strategy and CPPIB entered the private equity market soon after Weisdorf’s arrival two years ago. At the time of his departure, CPPIB cited differences in management philosophy as the reason for Weisdorf’s resignation. A spokesman said at the time that CPPIB would be looking to replace Weisdorf, but as of yet there have been no announcements or projections as to when the post would be filled.
Paul Capital has launched its effort to raise Paul Capital Partners VIII. The San Francisco-based secondary firm expects to close on $800 million. The fund will be dedicated to purchasing limited partnership interests in buyout, mezzanine partnership and venture capital funds and portfolios. Paul Capital recently won a $125 million commitment to its Paul Capital Top-Tier Investments II fund from the Florida State Board of Administration. The Top-Tier fund, a vintage 2002 fund-of-funds that now has over $500 million, makes both primary and secondary investments in venture funds.