Side Letter: CPPIB’s PE shake-up; Apollo’s $5bn target; Sequoia’s growth haul

CPPIB's PE head is on the move, and his successor will have their work cut out for them. Plus: Apollo has set a lofty target for its sophomore debt-equity fund and Sequoia has collected billions for a series of growth equity funds. Here's today's brief, for our valued subscribers only.

They said it

“Looking closely at what chairman Gensler and the other Democratic commissioners have said, we’re looking at a move away from more access.”

Chris Hayes, senior policy counsel at ILPA, tells affiliate title Regulatory Compliance Watch he supports the US Securities and Exchange Commission’s heightened focus on retail participation in PE, which ILPA fears could lead to diminished returns (registration required).

Just happened

CPPIB’s shake-up
The secondaries market has received a mark of validation – if ever it needed one. Shane Feeney, who’s been head of private equity at Canada Pension Plan Investment Board since 2018, is set to join Toronto-headquartered Northleaf Capital Partners to lead its global secondaries strategy, Private Equity International revealed yesterday afternoon.

Side Letter understands that Feeney will stay on to ensure an orderly handover, though according to a source familiar with the matter, he’s expected to join Northleaf after the summer. His successor at CPPIB is also being worked out.

Feeney’s departure comes at a critical time. Our latest GI 100 ranking of the world’s biggest PE investors, out next week, shows an investor universe with a voracious appetite for the asset class. CPPIB topped last year’s ranking, and this year’s list includes 16 new entrants hot on the heels of the incumbents. His replacement will have their work cut out for them.

Apollo’s Value add
Apollo Global Management is seeking up to $5 billion for its second Hybrid Value Fund, affiliate title Buyouts reports (registration required). The firm had collected $3.2 billion for the vehicle as of 31 March, which will be used to make long-term, non-control investments in structured equity and distressed investment opportunities, with recent deals including travel company Expedia and printing business Cimpress. Apollo collected $3.25 billion against a $3 billion target for its inaugural hybrid fund, which has so far delivered a 25 percent net IRR and 1.3x MOIC.

OTPP’s VC appetite
Ontario Teachers’ Pension Plan‘s VC arm wants to deploy up to C$2 billion ($1.6 billion; €1.3 billion) per year, affiliate title Agri Investor reports (registration required). Teachers’ Innovation Platform was launched in 2019 to give the C$221 billion pension direct exposure to emerging tech sectors. The unit, which has assembled a circa C$3.7 billion portfolio of funds and direct investments, generated a 16.3 percent return in 2020, outperforming public equities (15.2 percent) and PE (13.5 percent), per its annual report.


Sequoia’s $5bn haul
Sequoia Capital has raised more than $5 billion across three growth funds, according to recent SEC filings. The total includes $2.8 billion for China Growth Fund VI, $1.5 billion for US Growth Partners Fund IX and $825 million for India Growth Fund III. The three vehicles, which could still be in market, have already amassed about 43 percent more than the $3.5 billion Sequoia collected for their predecessors, according to PEI data.

Banking burnout
UK PE has benefited from a burnout crisis in investment banking, FN London reports. Applications for associate-level PE roles in the City climbed 20 percent in the first quarter, adding to the 300 applications typically expected for each available position. Junior banking roles have come under renewed scrutiny in recent months after a group of Goldman analysts leaked an internal presentation detailing 100-hour weeks and declining mental health.

Dig deeper

Institution: China Life Insurance Company (Taiwan)
Headquarters: Taipei, Taiwan
AUM: NT$2.10 trillion

China Life Insurance Company (Taiwan) has agreed to commit $30 million each to Insight Partners XII and KKR North America Fund XIII.

The Taiwanese insurer’s recent private equity commitments have focused on diversified sectors in North America, Europe and Asia-Pacific.

For more information on China Life Insurance Company, as well as more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Alex Lynn with Adam LeRod James and Carmela Mendoza.