June 4, 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:
• US$60 million to Carlyle Venture Partners II, a venture capital fund managed by The Carlyle Group, a global private equity firm based in Washington, DC. Carlyle Venture Partners II, with a target size of US$500 million, is to be invested over the next five years in companies providing infrastructure for enterprises and communications networks primarily in the United States.
• US$75 million to MPM BioVentures III, a fund managed by MPM Capital with its head office located in Boston, Massachusetts. MPM BioVentures III, with an expected target of US$750 million, is to be invested over the next five years in venture capital opportunities. The Fund will focus on the life sciences and healthcare sectors primarily in the United States and Europe.
• Euro 100 million to PAI Europe III, a fund managed by PAI Management with its head office in Paris, France. PAI Europe III, with an expected target of Euro1.75 billion, is to be invested over the next five years in European private equity opportunities. The Fund will focus on Leveraged Buyouts and Managements Buyouts of companies primarily in Western Europe.
The CPP Investment Board plans to invest up to 10 per cent of total assets in private equity. To date, C$3.0 billion has been committed to 20 limited partnerships managed by 18 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% per cent 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