August 14, 2003
The CPP Investment Board announced today $550 million in commitments to new and existing private equity partners with funds in Canada and the United States.
This brings the CPP Investment Board’s private equity commitments to a total of $5.6 billion committed to 37 limited partnerships managed by 32 private equity firms. Private equity commitments will be drawn down during the next several years. To date, $1.6 billion of the commitments has been invested. The CPP Investment Board’s newest commitments are:
• Up to US$75 million to the Ares Corporate Opportunities Fund to be managed by Ares Management, to be drawn down over five years. The fund will focus on providing junior capital to facilitate the restructuring or growth of highly leveraged middle-market companies in North America. Ares Management, based in Los Angeles, manages more than US$4 billion of private equity, leveraged loans and high yield bonds.
• US$150 million managed by Credit Suisse First Boston (CSFB) Private Equity Customized Fund Investment Group – of which US$100 million has been committed to a “fund of funds” to be committed over three years for investments in U.S. mid-market buyout funds, and US$50 million has been committed to a co-investment program to be drawn down over seven years. CSFB Private Equity currently manages over US$29 billion in assets and is part of the Credit Suisse Group, a global financial services company with headquarters in Zurich, Switzerland.
• US$75 million managed by Lehman Brothers Venture Partners 2003, sponsored by Lehman Brothers Private Equity, to be drawn down over five years. The fund will invest in mid- to later-stage venture capital investment opportunities in North America. Lehman Brothers Private Equity currently manages US$4.5 billion in assets and is part of Lehman Brothers Holdings Inc., a global investment bank with headquarters in New York City.
The CPP Investment Board has also increased its commitment to two existing private equity partners:
• An additional $100 million to the Kensington Capital Partners Limited, of which $50 million has been committed for the Canadian buyout “fund of funds” and $50 million to a related fund that will co-invest directly in private companies located primarily in Canada. The CPP Investment Board’s total commitment to Kensington Capital Partners Limited is now $200 million.
• An additional US$25 million to Lexington Capital Partners V for investment in secondary market opportunities. The CPP Investment Board’s total commitment to Lexington Capital Partners V is now US$75 million.
“These commitments further diversify our private equity portfolio and the total CPP portfolio,” said Mark Weisdorf, Vice President – Private Market Investments for the CPP Investment Board. “As an institutional investor with a long time horizon, we have the time to take advantage of the attractive returns that private equity can generate over a 10 to 12 year timeframe.”
The total Canada Pension Plan portfolio, which includes contributions to the Canada Pension Plan net of benefits paid, is $61.6 billion. In time the CPP Investment Board plans to invest up to 10 per cent of the total portfolio in private equity.
CPP Investment Board
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 and real estate 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 Canada Pension 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 more information on the CPP Investment Board, visit www.cppib.ca.
For further information contact:
Vice President – Communications and Stakeholder Relations
Communications and Stakeholder Relations