CPPIB shops $1bn portfolio – exclusive

The private equity portfolio is diversified by vintage and region, Secondaries Investor has learned.

Canada Pension Plan Investment Board is selling a portfolio of private equity fund stakes worth at least $1 billion, Secondaries Investor has learned.

The Toronto-headquartered pension giant wants to offload a portfolio containing a global mix of interests that are diversified by vintage, according to four sources familiar with the deal.

It is understood that Park Hill has been hired to advise on the process.

CPPIB had almost 19 percent of its C$316.7 billion ($234.5 billion; €208.8 billion) net assets in private equity as of 31 March, according to its 2017 Annual Report. The private equity portfolio generated an average of around 13 percent net returns across Canadian, foreign and emerging markets.

The pension was invested in 207 private equity vehicles as of 31 December, according to its website. Its largest commitments include $1 billion to Blackstone’s long-term capital vehicle, Core Equity Partners, a $992 million commitment to Apollo Investment Fund VIII and $750 million to Silver Lake Partners IV.

One third of CPPIB’s private equity portfolio by fund count has a vintage of 2007 or prior, according to its website.

CPPIB is active on both the buy-side and sell-side of secondaries deals. Over the past 17 months the pension has acquired at least two portfolios worth around $1 billion: a deal in the first quarter of this year involving stakes held in Ardian’s 2006-vintage secondaries vehicle, and a portfolio at the beginning of last year from Australian sovereign wealth fund Future Fund.

On the sell-side, the pension’s sales include stakes in funds managed by PAI Partners to HarbourVest Partners in 2015.

Traditional limited partners, sovereign wealth funds, primary funds of funds and separately managed accounts together hold $20 billion in capital to seek to opportunistic acquisitions of secondaries assets, according to Campbell Lutyens’ 2017 Secondary Market Overview Report.

This brings the total available dry powder for secondaries to $89 billion, the advisory firm and placement agent noted.

CPPIB and Park Hill declined to comment.