Canadian LPs share mid-market asset

Ontario Teachers' has sold a minority stake in proxy advisory firm Glass Lewis to fellow Canadian LP AIMCo.

The Ontario Teachers’ Pension Plan has sold 20 percent of San Francisco-based proxy advisory firm Glass Lewis and Company to the Alberta Investment Management Corporation.  

Terms of the transaction were not disclosed. OTPP acquired 100 percent of the company for $46 million in 2006.

Glass Lewis provides analysis of governance, finance, accounting, legal and political risks at public companies and is one of two major proxy advisory firms globally, the other being Institutional Shareholder Services. The sale to AIMCo represents the first time Teachers’ has partially exited the company.

“It is our understanding that Teachers' will continue to maintain an ownership position in Glass Lewis and that it is seeking other like-minded investors to become partners in the company,” chief executive officer of AIMCo Leo de Bever told Private Equity International.  

The decision to bring in another institutional investor was driven more by the benefits of “bringing in new perspectives to the next stages of Glass Lewis’ development” than financial returns, according to a spokesperson for OTPP. 

While it is rare for AIMCo to purchase a minority stake in a company owned by another Canadian institutional investor, the transaction is not the first time OTPP and AIMCo have partnered on a transaction. 

Last year, the two groups participated in the $3.8 billion purchase of TMX Group alongside a consortium of investors including Caisse de dépôt et placement du Québec and the Canada Pension Plan Investment Board. In 2011, AIMCo acquired 50 percent of Chilean electricity utility Grupo SAESA, of which OTPP owned the other 50 percent stake. 

Earlier this year, Teachers’ Private Capital, the direct investing arm of OTPP, reported that it had generated a return of 18.6 percent in 2012, well above its 13.3 percent benchmark. The pension has been particularly active investing internationally in recent years, with roughly 90 percent of its assets today outside of Canada.