CPPIB to pour $400m into Canadian FoF

The Canadian Pension Plan Investment Board (CPPIB) is planning to invest $400 million in small and mid-cap Canadian venture capital and private equity funds, via a fund of funds programme that will be managed by CPPIB’s longstanding investment partner, Northleaf Capital Partners.

The move comes as Canada’s fundraising market finishes off an exceptionally sluggish year; private equity funds raised C$649 million during the first three quarters of 2009. That compares to $5.6 billion in 2008, according to the Canadian Venture Capital and Private Equity Association.

Expanding our investment in a Canadian fund of funds is a highly effective way for us to access small to middle-market Canadian private equity transactions. Mark Wiseman

The lack of capital in Candian venture and smaller private equity funds could provide an opening for proactive investors like CPPIB to get a head start on the best deals. “Expanding our investment in a Canadian fund of funds is a highly effective way for us to access small to middle-market Canadian private equity transactions,” Mark Wiseman, senior vice president for CPPIB, said in a statement. “We believe that these investments will generate attractive risk-adjusted returns.”

CPPIB kicked off 2010 by promoting Wiseman to lead all private equity, real estate and public transactions for the firm, which in November posted a $6.9 billion gain in the value of its total portfolio. Wiseman has said the firm expects its portfolio to double in size over the next five to seven years.