CPPIB lead buyer in Providence stapled deal – exclusive

Canada Pension Plan Investment Board has emerged as the lead backer in a stapled tender offer involving Providence Equity Partners‘ 2011-vintage fund and its latest vehicle, Secondaries Investor has learned.

The Toronto-based pension has offered limited partners in the $5 billion Providence Equity Partners VII a 3 percent premium to net asset value as of 31 March, according to two sources familiar with the matter.

HarbourVest Partners and StepStone are also set to invest in the deal, the two sources said. It is understood that Park Hill is advising on the deal.

LPs have until 20 July to inform Providence if they would like to sell their stakes. The buyers will commit to Providence Equity Partners VIII on a 2:1 secondaries to primary ratio. It is understood that Fund VIII, which launched in April last year, has raised more than $4 billion of its $5 billion target.

Investors in Fund VII include Florida State Board of Administration, Massachusetts Pension Reserves Investment Management Board and Fubon Life Insurance, according to PEI data. Fund VII delivered a 24.2 percent net internal rate of return and a 1.7x net multiple as of 31 March, according to a source familiar with the vehicle’s performance.

Fund VIII will target a diversified portfolio of 15 to 20 investments and will invest between $150 million and $500 million in companies with enterprise values between $500 million and $2 billion, according to an investment presentation for the Texas Municipal Retirement System on 22-23 March.

PE Hub first reported that Providence was running a tender offer process on Fund VII.

Providence has at least $57 billion in assets under management across private equity and private credit, according to its website. The firm specialises in equity investments in media, communications, education and information industries.

CPPIB, Providence, HarbourVest and StepStone declined to comment. Park Hill did not return requests for comment by press time.