They said it
“We have a highly intense incentive compensation system that our industry has produced. So, if people want more wealth, we can do more deals and we can do better deals. We’re not a group that’s looking to maximise a given tax rate.”
GPIF’s $6bn appetite
It’s no secret that GPIF – the world’s largest pension fund – has grand designs for PE. Now, thanks to its latest annual report (published in Japanese), the true scale of those designs has become more clear. The ¥186 trillion ($1.7 trillion; €1.4 trillion) institution has already committed up to ¥708.1 billion, or about $6.4 billion, to the asset class via its gatekeepers and fund of funds managers.
Given that GPIF’s current PE portfolio is valued at just ¥61 billion, it’s still relatively small fry. However, to give some idea of scale, a $6.4 billion portfolio would put GPIF at 62nd in our latest Global Investor 100 ranking, overtaking the likes of Universities Superannuation Scheme, University of Michigan and Employees Retirement System of Texas.
GPIF has so far committed just 1.6 percent of its total AUM to alts, and it’s permitted to invest up to 5 percent. The process may take some time, but there’s little doubt GPIF is set to become a major force in PE and beyond.
Ares scores a winner
Ares Management said last week it had splurged more than $1 billion into the sports, media and entertainment sectors over the past six months. Most notable of these investments was its purchase of a roughly 34 percent stake in the majority shareholder of reigning Spanish football champions Atlético Madrid. Readers may recall that Ares’ appetite for the beautiful game was first reported by Private Equity International in September, with the firm linked to a Miami-based outfit planning to build a portfolio of global football clubs.
Apollo Global Management became the latest PE giant to dabble in GP stakes, disclosing plans last week to acquire a stake in fintech specialist Motive Partners (press release here). The partnership will see Motive Create, the firm’s in-house innovation team, set loose on Apollo’s own technology to bolster new product development, distribution and deal origination. With conflicts of interest a potential concern for the increasingly complex universe of blindpool GP stakes, could symbiotic relationships between target and owner prove a more appealing prospect for all involved? Let us know your thoughts.
Laguerre du Nord
Martin Laguerre, Caisse de dépôt et placement du Québec’s new PE chief, has inherited one of the industry’s largest portfolios – the institution ranked second in our latest GI 100. Despite its size, Laguerre hopes to further widen the pension system’s scope of investing. He recently outlined these plans to our colleagues at Buyouts (registration required). Here are some key takeaways:
- CDPQ’s traditional emphasis on buyout deals will be balanced half-and-half with growth equity and venture investing. The pension has previously favoured large-cap transactions ranging from $300 million to $1 billion, and Laguerre now expects to see more mid-market investing below that segment.
- Laguerre was hired by CDPQ two years ago from CPP Investments to run capital solutions, a C$5 billion ($4 billion; €3.4 billion) specialty finance, quasi-equity and opportunistic credit unit. With his promotion, the unit was merged with the PE platform, which could see the pension start to offer debt solutions.
- Asia is also a key area of post-pandemic opportunity given that it’s “growing faster than the West” thanks to “a lot of innovation”.
LP meetings. It’s Monday, so here are some LP meetings to watch out for this week.
- Nebraska Investment Council
- Tacoma Employees’ Retirement System
- New York City Employees’ Retirement System
- Teachers’ Retirement System of Louisiana