February 21, 2003
The CPP Investment Board announced today that it has completed a EUR 221 million investment to fund part of a EUR 1.5 billion secondary acquisition of a global private equity portfolio from Deutsche Bank. In addition, it has committed up to EUR 32 million for follow-on investments in the portfolio. The portfolio consists of equity interests in more than 80 private companies in a wide range of industries in the U.S. and Europe.
The late-stage private equity portfolio has been acquired and will be managed through a new limited partnership, MidOcean Partners, L.P., which has been established by the former senior management of DB Capital Partners, the private equity arm of Deutsche Bank. Paul Capital Partners and NIB Capital Private Equity, strategic partners of the CPP Investment Board, have also made significant investments in the portfolio, alongside the CPP Investment Board and a number of other experienced private equity investors, including our Canadian colleagues Ontario Teachers’ Pension Plan.
“We were invited to participate in this transaction due in large part to our growing reputation as an attractive private equity partner. With our liquidity and long term investment horizon, we are in a good position to take advantage of attractive opportunities in active secondary markets”, said Mark Weisdorf, Vice-President, Private Market Investments, CPP Investment Board.
“This investment demonstrates our strategy to leverage our relationships with strategic partners who have valuable expertise in direct and secondary private equity investments. Because this commitment consists of an existing portfolio of companies which will be sold over the next five years, we will benefit from earlier returns than with our other private equity fund commitments. New private equity funds are just beginning to draw capital against commitments for investment, and will not begin selling portfolio companies to realize returns for a numbers of year in the future,” added Weisdorf.
Over the long term, the CPP Investment Board plans to invest up to 15 percent of its total equity assets in alternative investments such as private equity, real estate and infrastructure assets.
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 in capital markets. Cash flows are currently invested in equities and real estate to balance the cash and bonds 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. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. Its fiscal year is from April 1 to March 31. For more information on the CPP Investment Board, visit www.cppib.ca.
For further information contact:
Mark Weisdorf
Vice President – Private Market Investments
416-868-1538
or
Ian Dale
Vice-President – Communications and Stakeholder Relations
416-868-4086
idale@cppib.ca