CPPIB Canadian general partner Q4 2007 performance numbers
It has been 20 weeks since the end of the fourth quarter of 2007, and we are now able to have a look at the CPP Investment Board GP results for the December quarter.
This post covers the Canadian general partners that have been lucky enough to receive a limited partner commitment from the CPPIB. For the fourth consecutive quarter, Canada’s very own national pension fund didn’t make a single new direct formal commitment to a Canadian general partner (Buyout, Venture, Venture Debt or Mezannine).
The CPPIB team did commit, however, to sixteen U.S. and international GPs during 2007. When you ask yourself why Canada is living through a venture capital crisis (see prior posts “Deloitte’s study on Canadian VC Crisis is well-timed“, December 6-07 and “Ontario politicians asked to address deteriorating VC climate part 2” October 26-07), remember that 16-0 scorecard.
The stand for the year was FountainVest China Growth Fund, which received a $1.5 billion commitment from our pension plan. To put that figure in context, in 2007 CPPIB has committed almost as much capital to a single China fund as it has to the entire Canadian fund industry during the past decade. [June 2nd NTD: Whoops. Bad research on my part. I totally missed the Yen currency note. Apologies, and thanks to readers who pointed it out.]
Canadian GPs (inc. PE, Debt, VC and Fund of Fund) have received aggregate commitments of $2.161 billion since 2000.
One China fund almost swamped us with the single stroke of a pen, and they don’t even have a website up and running.
As Roger McNamee told the audience yesterday at the CVCA Annual Meeting: “this century belongs to China”. Little did he know that Canadians apparently have more faith in the Chinese economy than their own.
If you are a regular visitor to the site, you’ll know that we’ve previously pulled the figures showing the performance results that the Canada Pension Plan Investment Board is receiving from its GP relationships (they’ll want me to remind you that’s calendar Q4, not CPPIB’s fiscal Q4).
The figures that follow cover four categories: CPPIB’s commitment, paid-in-capital (which tells you how much of the fund is invested in deals and/or drawn to pay management fees) reported value, and reported value + distributions (which tells you what the notional simple return of the fund is against the paid-in-capital figure). That figure is based in large part on what the manager believes the portfolio is worth as at December 31, 2007, subject to GAAP fair value accounting. MM means millions.
As we’ve done in the past, I’ve added our own Fund II returns (as at Q4/07) as they get muddled when included as part of the CPPIB Legacy fund of fund program that committed $10 million in December 2004 (back when Edgestone ran the program for CPPIB) to our $83MM Wellington Financial Fund II. Fund II ceased pursuing new transactions in August 2006 with the first closing of our $125.9MM Fund III that month (CPPIB doesn’t have $ in our Fund III via TD’s VC fund-of-fund program):
Canadian Venture Funds
Celtic House VP Fund II (2002 US$):
$13.5MM, $12.7MM (94.1%), $11.3MM, $21.9MM (+72.4%)
Celtic House VP Fund III (2005):
$50MM, $17.6M (35.2%), $12.8MM, $12.9MM (-26.7%)
Edgestone Venture Fund (2000):
$50MM, $44.6MM (89.2%), $10.8MM, $50.6MM (+13.5%)
Edgestone Venture Fund II (2004):
$50MM, $35.8MM (71.6%), $33.2MM, $33.2MM (-7.3%)
MDS Life Sciences Technology Fund II (2002):
$200MM, $101.3MM (50.7%), $49.9MM, $93.2MM (-8.0%)
Skypoint Telecom Fund II (2001 US$):
$25MM, $21.2MM (84.8%), $10.3MM, $13.9MM (-34.4%)
TD Capital Legacy VC Fund (2002):
$82MM (originally $100MM), $52.3 (63.8%), $34.2MM, $41.2MM (-21.2%)
Ventures West 8 (2003):
$50MM, $32.8 (65.6%), $27.3MM, $27.6MM (-15.9%)
Wellington Financial Fund II (December 2004):
(CPPIB participated in our $83MM Fund II via a $10MM commitment by the Legacy VC Fund)
$83MM fund size, $56.3MM (67.9%), $9.5MM, $70.7MM (+25.6%)
Canadian Buyout Funds
Birch Hill Equity Partners III (2005):
$85MM, $35.4MM (41.6%), $35.2MM, $38.4MM (+8.5%)
Edgestone Equity Fund II (2002):
$100MM, $77.9MM (77.9%), $53.9, $111.2MM (+42.7%)
Edgestone Equity Fund III (2006):
$100MM, $39.6MM (39.6%), $38.4MM, $42.4MM (+7.1%)
Kensington Co-investment Fund (2002):
$40MM, $39.9MM (99.8%), $55.4MM, $60.0MM (+50.4%)
Onex Partners (2003 US$):
$150MM, $127.3MM (84.9%), $182.1MM, $342.7MM (+169.2%)
Perseis Private Equity (2002):
$75MM, $56.4MM (75.2%), $37.7MM, $47.5MM (-15.8%)
TD Capital CFOF Legacy Buyout (2002):
$121MM, $90.4MM (74.7%), $84.2MM, $110.5MM (+22.2%)
Tricap Restructuring Fund (2001):
$150MM, $150.9MM (100.6%), $72.1MM, $213.1MM (+41.2%)
Tricap II (2006):
$300MM, $204.5MM (68.2%), $109.5MM, $198.7MM (-2.8%)
Tricap’s 2006 fund has put out a tremendous amount of capital in Q4, jumping from 33% of their capital drawn to a whopping 68%. Time to raise a new fund.
Over at Celtic House, it was nice to see that the swings in the share price at Sandvine (SVC:TSX) didn’t hurt the returns on their Fund II.
My understanding is that they are committing USD 200M. Similar to their investment strategy in Turkey (search Actera Partners).
February 26, 2008
HONG KONG (February 26, 2008): The Canada Pension Plan Investment Board, the investment management organization that invests the reserve fund assets of the Canada Pension Plan, and Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan, announced today they are investing US$200 million each in FountainVest, a newly-established private equity fund focused on investing in private enterprises in China.
The CPP Investment Board and Teachers’ Private Capital jointly co-sponsored the fund. The FountainVest fund will focus on investment opportunities in private enterprises that can benefit from both earnings growth and expansion.
Mark Wiseman, senior vice-president for Private Investments with the CPP Investment Board said, “We are pleased to be partnering with one of the top fund managers in China, which is itself a rapidly evolving market for private equity. This investment, which is one of our largest in the region, will provide enhanced access to investment opportunities in mainland China through an aligned and well-positioned partner. Including the FountainVest investment, the CPPIB now has over C$1 billion committed to private equity and real estate investments in the region.”
Erol Uzumeri, senior vice-president of Teachers’ Private Capital said, “This new fund combines a proven local management team with dedicated capital to take advantage of the large market and growth potential in China. We’ve been an investor in Asia since 1994 and continue to look for opportunities to back the best local teams to help us invest in the region.” He added Teachers’ Private Capital has C$1 billion invested and committed to the Asian region.
With a presence in Shanghai and Hong Kong, the management team of FountainVest is made up of four senior professionals with international investment experience and a strong track record of investing in China. They are Chinese natives with past experience at such organizations as Temasek Holdings, Goldman Sachs and JP Morgan Partners.
About CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At December 31, 2007, the CPP Fund totaled C$119.4 billion of which C$20.2 billion is invested in private investments.
For more information about the CPP Investment Board, visit http://www.cppib.ca.
Just click through to the “commitments” list and you’ll see the $1.5 billion figure.
The FountainVest China Growth Fund 2007 is 1,500.0 in Japanese Yen.
Thanks for that. Bad research on my part. Missed the currency note. Original post has been corrected.