August 2, 2002
The CPP Investment Board announced today three further commitments to private equity funds for investment over the next several years in private companies.
The commitments are:
• C$100 million managed by Kensington Capital Partners Limited, of which C$50 million has been committed to a “fund of funds”, for investments of between C$5 million and C$10 million in Canadian buyout funds; and C$50 million has been committed to a related fund that will co-invest directly in private companies, primarily in Canada. The co-investments will be sourced from managers of the Canadian buyout funds in the “fund of funds”, as well as from managers of other Canadian private equity funds to which the CPP Investment Board has made commitments.
• US$150 million to Lindsay Goldberg & Bessemer L.P. and co-investments managed by Goldberg Lindsay & Co. LLC based in New York. The Fund, with an expected size of US$2.0 billion, is to be invested over the next five years and will target private companies in traditional established industries, such as basic manufacturing, financial services, commodity-based manufacturing and health care.
• €150 million to Terra Firma Capital Partners II, LP, a fund advised by Terra Firma Capital Partners Limited with its head office in London, England. The Fund, with a target size of €3.0 billion, is to be invested over the next five years in European private equity opportunities. The Fund will focus on leveraged buyouts in low growth and out of favor sectors primarily in Western Europe.
The CPP Investment Board plans to invest up to 10 percent of total assets in private equity. To date, C$4.1 billion has been committed to 27 limited partnerships managed by 23 private equity firms. The commitments will be drawn down over the next several years. As of March 31, 2002, C$458 million, or approximately 3.2 percent of the CPP Investment Board’s total assets, has been invested in private equity.
The remainder of the CPP Investment Board’s assets are primarily invested in funds that replicate stock indexes for Canadian, U.S. and non-North American publicly traded equities. Private equity is expected to produce higher returns than public equity over the long term.
Created in December 1997, the CPP Investment Board is a crown corporation that invests funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are invested 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:
Mark Weisdorf Vice President – Private Market Investments 416-868-1538