April 22, 2002
The CPP Investment Board announced today the commitment of US$150 million to Apollo Management to be invested over the next five years in corporate buyout and restructuring opportunities, primarily in the United States.
The US$3.8 billion Apollo Investment Fund V is approximately one-quarter of the US$15 billion in assets Apollo already has invested and managed since its inception in 1990.
Since announcing in June, 2001 that it would invest up to 10 percent of assets in private equity, the CPP Investment Board has formed relationships with 15 private equity firms. Approximately C$2.7 billion has been committed, or approximately 19 percent of the C$14 billion in assets reported on December 31, 2001. Actual investments are 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 approximately 70 percent of cash inflows in a stock fund based on the TSE Composite Index and 30 percent in U.S. and international index funds. Private equity is 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