Side Letter: GPIF shuns directs, Amundi’s €10bn goal, TMT skyrockets

Just happened

Hiro-ic pursuits

Japan’s Government Pension Investment Fund, the world’s biggest pension, is not pursuing the “Canadian model” of originating, evaluating and investing in private assets by itself. “We have no plans to take any investment in-house. Our aim is to become in a way a top-class fund of funds manager,” CIO Hiro Mizuno tells us. It is also revising its alternative investment blueprint, scaling up from the “meaningless” 0.21 percent allocated to PE as of December, towards its 5 percent target. It plans on doing this by finding partnership opportunities with other global pensions. “GPIF is not going to be a GP,” Mizuno says.

The road to €10bn

Amundi Group’s real assets and alternative business plans to grow its exposure to private equity to at least €10 billion by 2020. That figure is more than 40 percent larger than its current AUM of €7 billion, most of which is in fund commitments. Pedro Arias, global head of real assets and alternatives, says growing interest in PE from both domestic and global LPs is guiding the firm’s momentum. The firm plans to hit its goal by raising more capital from LPs and by acquiring boutique investment firms, said Arias.

PE earns its keep

Private equity investment has boosted revenues in UK businesses by more than 50 percent over the last five years, according to research by accountancy firm BDO. The 2,000 PE-backed firms analysed by BDO have generated an additional £17 billion ($22 billion; €17.9 billion) in revenues since 2013 to reach £47.1 billion. PE-backed companies increased their employment levels by 43 percent over the period, equating to 86,500 UK jobs. The research does not reveal growth figures for non-PE-backed companies.


Ham Lane, Abraaj. Hamilton Lane’s uncomfortable connection with Abraaj is the subject of a worthwhile read on Pensions & Investments. “All institutional investors in Abraaj funds reviewed […] had Hamilton Lane as the private equity consultant,” the paper writes (paywall), noting other consultants have distanced themselves from the fallen EM investor, while Washington State Investment Board “had a serious and purposeful conversation [with Hamilton Lane] about due diligence.” Hamilton Lane has declined to comment on the Abraaj connection.

Four in FIVE. AfricInvest has held a fourth close on FIVE, an evergreen platform for investing in African financial institutions. FIVE has so far raised €82.5 million towards its €200 million target. The latest closing sees African Development Bank join existing investors FMO and BIO, the development finance institutions of the Netherlands and Belgium respectively; Norway’s Norfund; Denmark’s IFU; Germany’s KfW; and Kenya’s CBK Pension Fund. The Tunisia-headquartered firm is understood be targeting around $500 million for AfricInvest Fund IV, PEI reported in January. It is due to open a Johannesburg bureau this year.

Dig deeper

Want more data? There are more than 6,700 institutions in our database, including GPIFAmundiHamilton Lane and Abraaj from today’s Side Letter.

We did the math

TMT: I’m dynamite! Capital raised for funds focusing on tech, media and telecoms in Q1 skyrocketed more than fourfold year-on-year, as our latest fundraising download shows. Thoma Bravo’s $12.6 billion haul for Fund XIII made up the bulk of the capital.

He said it

“Our orientation has not been to find a manager that has fee discounts or a social message that we like, so it is very much performance orientated. We’re backing top-quartile managers and then we’re trying to be their top co-investment partner when deals arise that are too big for their fund.”

Marcus Frampton, chief investment officer at Alaska Permanent Fund Corporation, on how the $65 billion SWF’s private equity co-investment programme has generated a more than 60 percent IRR since 2013.

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Today’s letter was prepared by Toby MitchenallAdam LeCarmela Mendoza and Alex Lynn.

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