Side Letter: CPP’s Kim interview; Goldman’s plans; US pension’s pause

The global head of private equity at the world's largest PE investor shares her thoughts on valuations, China and buying opportunities. Plus: Goldman eyes credit secondaries; and Fresno County Employees’ Retirement Association may pull back on PE. Here’s today's brief, for our valued subscribers only.

Just happened

Hot off the press: our April issue
The latest issue of Private Equity International is out today, including our recent sit down with Suyi Kim, global head of private equity at CPP Investments, in Hong Kong. The world’s largest private equity investor found it “very challenging” not being able to visit China during the country’s closure, according to Kim, who says the Canadian pension giant’s exposure to the country is “meaningful” and that there are internal China policy changes that the pension needs to get its head around better. You can read the full interview here.

Also in this issue is our annual fundraising report, which looks at how fund terms are becoming more reflective of market conditions and how some of the listed PE giants are pivoting to different strategies in a bid to beat the market. Separately, our Tech-enabled Investing 2023 special report looks at how technology is being used to address valuation and deal origination challenges.

You can download the full issue here.

From French buyout to energy player
Last week, we noted that Paris-based Omnes Capital had restructured into an energy transition-focused firm, following the carve-out of its buyout division by listed investment firm IDI. Our colleagues at Infrastructure Investor have since spoken to Serge Savasta, now chief executive at the firm, who walked them through the rationale behind the move. “Two years ago, we had seven activities ranging from small-cap French LBO activities to the international renewable energy private equity approach to infrastructure,” Savasta told Infrastructure Investor (registration required). “It made sense to split the group of activities into two companies, the first one being dedicated to energy transition and innovation. And the second, as a group of activities, more LBO and French market-orientated.”

Omnes is in market with its fifth renewable energy fund, Capenergie 5, with a €1.35 billion target. Along with renewable energy, the firm will back investments focused on sustainable cities and deep tech venture capital.

Goldman gives credit where it’s due
Trading in secondhand private debt fund stakes has grown in recent years, accounting for 4 percent, or around $4.4 billion, of total secondaries volume last year, according to data from Greenhill. The latest firm to think about entering this market is Goldman Sachs Asset Management.

In an interview with PEI senior editor Adam Le, the bank’s chief investment officer of wealth and asset management, Julian Salisbury, said credit secondaries was something the firm was working on. “We have a traditional private equity fund; we have a real estate secondaries fund; we have an infrastructure secondaries fund; we’re a primary participant in credit funds through our AIMS business. It’s a very natural extension that we would look at credit secondaries,” he said.

We’ll have more from the conversation with Salisbury this week.


Fresno’s no-FOMO

Existing relationships with LPs are proving to be gold dust as sluggish distributions cause headaches for investors. Fresno County Employees’ Retirement Association may pause making additional commitments for the second half of this year as its top investment officer believes the system’s consultants have overestimated projected distributions, affiliate title Buyouts reports (registration required). Fresno’s investment officer Anirudh Chowdhry recommended the system pause making new private equity and private credit commitments in a note ahead of the system’s next board meeting.

Chowdhry told Buyouts the system would continue to fund existing commitments. The proposed pause would carry little downside risk, Chowdhry said, adding that he has no “fear of missing out” as private equity fundraising cycles have extended from six months to more than 15 months. “(It’s) easy to accelerate pacing if needed post-December 2023,” Chowdhry said in the note.

Fresno would join a notable group of LPs that are pulling back on PE activity. In February, Alaska Permanent Fund CIO Marcus Frampton recommended slashing the system’s PE target to 15 percent over two years, from its current target of 17 percent, while Santa Barbara County Employees’ Retirement System has planned to cut its PE exposure by 4 percentage points over the next four years and Maryland State Retirement and Pension System is reducing the size and number of its annual commitments.

Dig deeper