Side Letter: Japan’s next LP giant; Canadian CIO shake-up; RedBird’s warchest

The world's largest university endowment is planning a significant push into alternatives. Plus: Canada's IMCO has tapped a former CPPIB boss as CIO and one of PE's biggest sports firms has amassed a big score. Here's today's brief, for our valued subscribers only.

They said it

“The infrastructure is straining and we don’t want it to break. You really have to fund the rails you ride on. It’s almost like the foundations and families that we work with are subsidising the creation of a market.”

Fran Seegull, executive director of the Tipping Point Fund, tells affiliate title New Private Markets that foundations and family offices believe GPs should start funding the data and measurement tools that support impact investing (registration required).

Just happened

Japan Mount Fuji

Japan’s next LP giant

A new university endowment in Japan, the largest of its kind globally, has big plans for alternative assets. The ¥10 trillion ($90.5 billion; €77.1 billion) fund, which is managed by the Japan Science and Technology Agency, wants to hire at least 20-30 alternatives specialists, chief investment officer Masakazu Kita told Bloomberg on Thursday. Kita, a former manager at Norinchukin Bank, said the portfolio could include assets such as private equity, real estate and infrastructure.

The fund is intended to start investing by the end of March. It is tasked with generating a 4.38 percent annual return, north of the average 3.7 percent return posted by Japan’s Government Pension Investment Fund, to help finance science and tech research each year.

Another potential Japanese LP will be welcome news to the international GP community, many of which hope to seduce this relatively untapped source of capital. GPIF has so far earmarked more than $6 billion for PE, as PEI reported last month. If other university endowments are anything to go by – Harvard, for example, has a 23 percent allocation to PE – Japan’s new fund could be a very exciting prospect indeed.

IMCO’s new CIO

Investment Management Corporation of Ontario is attempting to build a PE portfolio to rival that of its Canadian peers. Its latest step towards that goal? Hiring Rossitsa Stoyanova, CPP Investments‘ former head of portfolio design & construction, as CIO (statement here). She will join the C$73 billion ($58 billion; €49.7 billion) public pension manager on 13 September, replacing CIO Jean Michel, who leaves for pastures unknown.

There’s been quite a bit of change at CPP Investments of late. Hong Kong-based Suyi Kim will replace Shane Feeney as global PE head following the latter’s departure to Northleaf Capital Partners. Portfolio value creation head Maximilian Biagosch is replacing direct PE head Ryan Selwood, while president and chief executive Mark Machin resigned in February, and has since joined Singapore VC firm Serendipity.

Stoyanova represents a massive hiring coup for an institution with what, at C$2 billion, is currently a reasonably modest PE portfolio. IMCO aims to grow its PE AUM to C$6 billion or more by 2025 via directs, co-investments, strategic partnerships, and in-house investment resources. PEI caught up with Craig Ferguson, the man tasked with leading this PE charge, in February to discuss the process. You can read that interview here.


RedBird’s score

RedBird Capital Partners, one of the world’s largest sports firms, has collected $2.6 billion for its latest flagship fund series, our colleagues at Buyouts report (registration or subscription required). RedBird Series 2019 closed on $1.4 billion in March, with an additional $1.2 billion held in co-investment sidecars. It follows a period of record investing for the firm, with notable deals including Fenway Sports Group, a holding company anchored by the Boston Red Sox and Liverpool Football Club, and a 15 percent stake in Indian cricket franchise Rajasthan Royals.

PE’s love of sports isn’t always reciprocated by the targets, as CVC Capital Partners has been finding out recently. We wrote more about its latest endeavours in the sector yesterday.

Blue Owl’s next steps

Blue Owl Capital is expanding into secondaries, co-investments and GP-lending, co-president Michael Rees said on the firm’s debut earnings call on Tuesday (story here). An earnings presentation referred to the Strategic Capital business line, which sits on the GP stakes side of Blue Owl and is scheduled to launch this year. This division encompasses secondaries and co-investments. It follows news that Blue Owl is expanding its presence internationally by partnering with an Asia-based placement agent.

Today’s letter was prepared by Alex Lynn.