From supporting self-driving technology to embracing distance learning—a look at recent deals that are charting the course for the future
Taking the path towards self-driving technology
When and Where: March 2020; United States and Canada
The Deal: CPP Investments was among the lead investors in the first external investment round for Waymo, which closed at US$3.2 billion to help advance and scale its fully driverless Waymo Driver around the world.
The Players: Waymo began as Google’s self-driving car project in 2009. A decade later, Waymo is the proven leader in self-driving technology. Silver Lake and Mubadala Investment Company co-led the transaction alongside CPP Investments, and additional investors included Magna, Andreessen Horowitz and AutoNation, as well as Alphabet.
The Upshot: Waymo stands for a new way forward in mobility, with a mission to make it safe and easy for people and things to move around. The Waymo Driver can improve the world’s access to mobility while saving thousands of lives now lost to traffic crashes. Waymo has driven more than 20 million miles on public roads and, in 2018, became the first and only company to launch a public self-driving ride-hailing service and offers riders fully driverless rides in the Metro Phoenix [Arizona] area. Waymo is now producing it’s fifth-generation hardware, with all-new, more powerful compute and more capable sensing.
The Strategy: Consistent with our approach to identify and invest in long-horizon growth opportunities across the globe, Waymo has the potential to create several global markets of tremendous scale through the deployment of the Waymo Driver—and will enhance our ability to deliver long-term, sustainable returns for the Fund.
Boosting investment in South Korean logistics real estate
When and Where: April 2020; South Korea and Hong Kong
The Deal: CPP Investments teamed up with APG and ESR once again to establish a new US$1 billion development joint venture, ESR-KS II, representing one of the largest global logistics real estate capital raisings to date this year, with CPP Investments holding 45% of the total issued shares.
The Players: APG is the largest pension administrator in the Netherlands and manages approximately €533 billion (Feb. 2020) in pension assets. ESR is the largest APAC-focused logistics real estate platform by gross floor area, and spans across the People’s Republic of China, Japan, South Korea, Singapore, Australia and India.
The Upshot: Propelled by the positive trends of e-commerce, urbanization and domestic consumption in the region, the joint venture—which represents an investment capacity to deliver as much as US$2 billion in new development projects—will invest in and develop a best-in-class industrial and warehouse logistics portfolio in the Seoul and Busan metropolitan areas, the two markets with the largest populations and highest consumer spending in South Korea.
The Strategy: Asia’s consumer sector has been one of the Real Estate Asia team’s key investment themes. The continued growth of South Korea’s e-commerce market is driving the demand for quality logistics facilities. This new joint venture deepens our longstanding relationship with ESR and APG and is our third joint venture with ESR, and will be pivotal to our growth strategy in the logistics sector globally.
More wind in our sails in France
When and Where: May 2020; France, United Kingdom and Canada
The Deal: CPP Investments, through its wholly owned subsidiary CPP Investment Board Europe S.àr.l, acquired 49% of the entity that holds Enbridge Inc.’s stake in Éolien Maritime France SAS, Enbridge’s partnership with EDF Renewables, for approximately €80 million. The partnership is developing three offshore wind farms on the northern and western French coasts. A follow-on investment of €120 million is committed to the first project as it progresses through construction. The second project has also entered construction with €68 million in additional commitments. Further investments of €84 million may be made in the third offshore wind farm.
The Players: Enbridge Inc. is a leading North American energy infrastructure company, which generates approximately 1,750 MW of net renewable power in North America and Europe. Present in more than 20 countries, EDF Renewables develops, builds and operates renewable power plants.
The Upshot: This partnership represents significant opportunities to invest in and develop flagship offshore wind projects across France, which has established renewables as a cornerstone of its long-term energy plan. The winds farms, which are expected to become operational in phases between 2022 and 2024, have a planned total-installed capacity of 1.5 gigawatts.
The Strategy: In line with our focus on development and operational opportunities in low- and zero-carbon energy projects globally, CPP Investment’s Power & Renewables team believes this will provide additional diversification to its existing portfolio of assets and deepen access to future high-quality offshore wind development projects in Europe and Asia.
Animal-free protein feeds appetite for growth
When and Where: July 2020; United States and Canada
The Deal: CPP Investments led a new tranche of an expanded Series C round to support the growth of Perfect Day, a pioneering animal-free dairy maker, with a US$50 million investment—pushing the Bay Area startup Series C to US$300 million—which follows an initial $140 million C round that led to production breakthroughs years ahead of expectations.
The Players: Founded in 2014, Perfect Day is on a mission to revolutionize how dairy products are made to create a kinder, greener world. Instead of relying on cows, the company utilizes fermentation in microflora to create proprietary “flora-made” dairy protein.
The Upshot: Amid the global food supply challenges exposed by COVID-19, Perfect Day holds a unique advantage: the company and its partners can quickly increase or decrease production depending on demand, and can allocate a stable protein supply to where it is needed the most. The animal-free protein can be used across a range of products to deliver the same taste and texture of dairy with none of the environmental, animal welfare and food safety concerns.
The Strategy: This marks the first investment into our Thematic Investing team’s new Climate Change Opportunities strategy, which focuses on innovative companies that are well-positioned to respond to the challenges posed by climate change. Sustainable technologies like Perfect Day’s fermentation process are poised to capture structural shifts in industrial practices, physical resources and consumer preferences for environmentally conscious options, which are well-suited to our long-term investing approach.
Supporting a global leader in higher learning
When and Where: July 2020; United Kingdom, France and Canada
The Deal: CPP Investments joined a consortium of long-term global investors to acquire Galileo Global Education, a leading international provider of higher education and Europe’s largest higher education group. Through its wholly owned subsidiary CPP Investment Board Europe S.àr.l, the Fund will have a significant minority stake.
The Players: CPP Investments partnered with Montagu, one of Europe’s leading investors, alongside existing shareholders Téthys Invest (the investment holding of the Bettencourt-Meyers family) and Bpifrance, the French national investment bank.
The Upshot: The creation of this investor consortium provides major support for Galileo’s development and geographical expansion strategy. With a network of 42 schools in 13 countries, Galileo has proven its strength and adaptability in serving students, especially during the COVID-19 crisis. It is taking strong action to respond to digital demand: Studi, their digital education program specializing in distance learning, has seen strong growth since April and is increasing its workforce by recruiting an additional 100 people by the end of 2020.
The Strategy: By adapting to challenges and leveraging the use of technology, we are confident Galileo will generate long-term value in the business for the benefit of CPP contributors and beneficiaries.