CPP Investment Board Commitments to Private Equity Now TotalApril 10, 2002
The CPP Investment Board announced today the commitment of private equity funds to two London-based investment firms, bringing to 14 the total number of relationships formed with private equity firms during the past nine months.
The latest commitments are:
- 100 million euros (C$140 million) over five years to Candover Partners Limited, a wholly-owned subsidiary of Candover Investments plc, a company listed on the London Stock Exchange, which will manage the commitment. The Candover 2001 Fund, focusing on private equity buyout opportunities in the United Kingdom and Continental Europe, expects to raise 2.5 billion euros (C$3.5 billion) of which 70 percent is already committed. The focus will be on mid-size to large private firms in the media and technology, engineering, chemicals, financial services, healthcare, support services and leisure industries.
- US$75 million (C$120 million) to Coller Capital Limited to be invested over five years through the Coller International Partners IV limited partnership. The fund, which expects to raise US$1.0 billion, will acquire European and U.S. limited partnership interests in the secondary markets.
The CPP Investment Board announced last June that it would ultimately invest up to 10 percent of assets in private equity. To date, approximately C$2.6 billion has been committed to 14 private equity firms. This amount will be drawn down over the next four to six years. While these commitments represent approximately 19 percent of the C$14 billion in assets reported on December 31, 2001, actual investments represent less than four percent of total assets. The CPP Investment Board's assets are expected to exceed C$130 billion within 10 years.
The CPP Investment Board currently invests in publicly traded equities, with approximately 70 percent invested in funds based on the TSE 300 Index and 30 percent invested in U.S. and international index funds. Private market investments are expected to produce higher returns than public equity over the long term.
The CPP Investment Board is a crown corporation created by an Act of Parliament in December 1997. It invests funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested only in equities to balance the bond portfolio owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Plan to keep its pension promise to Canadians. Located in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments.
For further information contact:
Vice President - Private Market Investments