Side Letter: CDC’s new directs head, credit funds ready for restructurings, Future Fund’s ESG plans

CDC Group appoints former Onex exec to lead direct equity team; debt funds prepare for corporate restructurings; and more pitfalls in secondaries. Here’s today's brief, for our valued subscribers only.

Just happened

CDC’s PE hire

Tony Morgan
Tony Morgan. Credit: CDC

CDC Group has appointed private equity veteran Tony Morgan as its managing director for direct equity. He replaces Mark Pay, who left the UK development finance institution in December. Morgan will manage a $1.5 billion direct equity portfolio comprising businesses in Africa and Asia and lead a team of more than 100 staff. He was previously MD of Toronto-based financial services firm Onex and, before that, vice-president of Canada Pension Plan Investment Board. His nearly 20-year career in PE also includes stints at Alchemy Partners and Permira.

Private debt readies for restructurings

Private credit funds are increasing their capacity to deal with restructuring the companies they lend to as the global economy begins to turn, according to sister title Private Debt Investor. Robert von Finckenstein, head of private debt in Germany at corporate finance house Alantra, says many larger firms are investing in their restructuring capabilities and establishing workout teams to deal with problem loans. Defaults are expected to increase if the economy worsens, and Alantra says private debt funds need to be ready to step in, even before covenants have been triggered.

More hidden pitfalls in the secondaries market

A healthy equilibrium in buyer and seller expectations has helped propel transaction volumes in the secondaries market. But this shouldn’t be taken for granted, as we explore in our deep dive into hidden risks in the sub-asset class. Although transaction volumes continue to rise, a strong market has encouraged some transactions to come to market that might not make business sense. This makes deal selection more difficult and could drive a wedge between the expectations of buyers and sellers. It’s unlikely to thwart the GP-led market, but worth bearing in mind.


Late cycle jitters. New Mexico State Investment Council’s private equity portfolio generates one of the highest levels of return among all the asset classes in which the sovereign fund has invested. However, lower distributions over the last two years, especially in growth and buyouts strategies, have driven the fund to slash its annual PE investment target by almost 40 percent, effectively reducing capacity for new fund commitments. In this late market cycle, there is “a reluctance to charge ahead with the same confidence that existed under the outlook we had a few years back”, spokesman Charles Wollmann tells us.

ESG on the up Down Under. Aussie SWF Future Fund is putting managers under greater scrutiny about how they handle ESG issues in their portfolio. The institution is placing more emphasis on understanding the way firms engage with investee companies about their social and environmental impacts, deputy CIO Wendy Norris told delegates at an industry conference in Melbourne on Wednesday. The institution manages more than A$200 billion ($137 billion; €124 billion) across six public asset funds, of which around 16 percent is allocated to PE.

Dig deeper

Southern commitments. Texas County and District Retirement System has agreed to commit $100 million to Baring Asia Private Equity Fund VII. Here’s a breakdown of the $31.92 billion public pension’s total investment portfolio.

For more information on TCDRS, and more than 5,900 other institutions, check out the PEI database.

She said it

“Asset owners face higher scrutiny, and as we seek to be a responsible investor through the investments we make, we place more emphasis on understanding the way our managers engage with their investee companies about their social and environmental impacts.”

Wendy Norris, deputy CIO of Australia’s Future Fund, tells delegates at the Australian Investment Council Conference in Melbourne on Wednesday that the SWF is putting managers under greater scrutiny.

We would love your feedback to help us make this newsletter more useful; click here to give us your opinion.

Today’s letter was prepared by Isobel MarkhamAdam LeRod JamesCarmela MendozaPreeti Singh and John Bakie.

Subscribe now and get Side Letter delivered to your inbox each day

To find out how, email, or call our team:

London: +44 207 566 5432
New York: +1 646 545 6296
Hong Kong: +852 2153 3140