November 13, 2002
The CPP Investment Board announced today the commitment of almost half a billion dollars to three private equity funds as it continues to invest in assets that are alternatives to volatile stock markets.
The latest commitments bring to almost $5 billion the total to date that will be drawn down for actual investment in private companies over the next several years. To date, $1.1 billion has been invested in private equities and real estate, compared with $15.8 billion in public equities. The long-term goal is to invest up to 15 percent of total equity assets in alternative investments such as private equity, real estate and infrastructure assets.
The latest commitments are:
• US$100 million to JP Morgan Partners Global Investors Fund, sponsored by JP Morgan Partners, the private equity arm of JP Morgan Chase & Company, a global financial services firm headquartered in New York. JP Morgan Partners focuses on a broadly diversified portfolio ranging from venture capital, growth equity to mid-market buyouts on a global basis, from its eight offices around the world. JP Morgan Chase and predecessor entities have invested $11.2 billion in mid-market buyouts over the last 18 years. The Fund’s investment program is expected to include up to US$8 billion of capital of which up to US$6.25 billion is expected to be provided by JP Morgan Chase.
• Up to US$125 million to Thomas Weisel Global Growth Partners II, a fund of funds sponsored by Thomas Weisel Partners, an investment and merchant bank focused on the growth sectors of the U.S. economy. The Fund is comprised of three investment vehicles that will invest in venture capital through top-tier established funds, promising emerging funds and secondary purchases, respectively.
• US$81 million to a US$162 million secondary portfolio acquisition with Paul Capital Partners, a U.S. private equity firm and strategic partner of the CPP Investment Board. The portfolio consists of 16 private equity partnership interests, primarily in the buyout sector, and will be managed by Paul Capital Partners.
To date, C$4.9 billion has been committed to 33 limited partnerships managed by 28 private equity firms.
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:
Vice President – Private Market Investments