March 4, 2002
ALL AMOUNTS ARE IN CANADIAN DOLLARS UNLESS OTHERWISE NOTED
The CPP Investment Board announced today the commitment of approximately $220 million over five years to private equity funds in Europe and the United States.
The larger commitment is 100 million Euros ($140 million) to Bridgepoint Capital Limited for investment in mid-market buyout opportunities, equally divided between the United Kingdom and Continental Europe. The Second European Private Equity Fund managed by Bridgepoint Capital has a target size of 1.6 billion Euros ($2.4 billion). The investment firm was established in the 1980s as NatWest Equity Partners.
The second commitment is US$50 million ($80 million) to Lexington Partners Inc. for investment through the Lexington Capital Partners V limited partnership, investing in secondary market opportunities. The fund has a target size of US$2.5 billion. Lexington is the largest independent manager of secondary private equity capital with US$4.5 billion currently under management in more than 500 private equity limited partnerships. ”Both commitments diversify those made in the past nine months to 12 private equity firms for investment in private equity opportunities in Canada, the United States and Europe,” commented Mark Weisdorf, vice president responsible for private market investments at the CPP Investment Board. “So far we have commited approximately $2.3 billion to private equity funds to be drawn down over the next four to six years.”
The CPP Investment Board previously announced it would ultimately invest up to 10 percent of assets in private equity. While commitments to date represent approximately 17 percent of the $14 billion in assets reported on December 31, 2001, actual investments to date are less than three percent of total assets. The CPP Investment Board’s assets are growing rapidly and within 10 years are expected to exceed $130 billion. During this period, the commitments made to date will be drawn down by fund managers as suitable investments are identified. 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:
Mark Weisdorf Vice President – Private Market Investments 416-868-1538