Our Privately Speaking with Canada Pension Plan Investment Board’s secondaries team (pictured) is generating a lot of interest. We suspect this is either because everyone wants to know what the world’s most sophisticated institutional investor is up to, or because secondaries is still a cloak-and-dagger market. Perhaps it’s a bit of both.
This five-man team is giving traditional firms a run for their money and has clinched some of the biggest GP-led secondaries deals of the last 18 months. It is deploying annual capital almost on par with market leader Ardian.
The secret of CPPIB’s success? It’s more than having a lower cost of capital. The pension – which acts more like a sovereign wealth fund – is all things to everyone. Primary capital? Check. Secondaries capital? Check. Access to wider networks, directs expertise, preferred equity, balance sheet financing? Check. Oh and by all accounts they’re super-nice guys to boot.
With such a successful track record (team head Michael Woolhouse describes their returns as “well north of what’s expected of us”), the natural question is: when will they spin out? And with the exception of Singapore’s GIC, why haven’t there been more successful examples of in-house secondaries teams? We’d love to hear your thoughts: firstname.lastname@example.org
A Francisco Partners alum is raising Australia’s first private equity fund dedicated to mid-market tech companies. Sydney-based Potentia Capital – founded by Andrew Gray, a former partner at the Californian tech giant – is seeking between A$300 million ($214 million; €188 million) and A$400 million for its maiden blind-pool vehicle, according to a source with knowledge of the fund. The vehicle will provide growth and acquisition capital for Aussie and Kiwi tech businesses with EVs up to A$300 million that are looking to expand into Asia. There have been only 12 Australian tech funds raised since 2008, all of which are seed or venture capital vehicles, according to PEI data.
Elephant hunting? Seems dangerous
In Berlin, unseasonably sunny weather matched the sense of optimism among delegates at SuperReturn. Anxiety about dry powder and high valuations is being replaced by the sense that private markets are in the ascendancy and the stock market is full of companies waiting to be brought across – “this could be like the elephant hunting season we saw in ’07”, said one senior consultant. Two years ago, amid the now familiar late-cycle jitters, we reassured readers that this was not like 2007 because, for one thing, we were not seeing “ambitious public-to-private transactions” driving dizzy pre-crisis deal volumes. Oh dear.
Gray’s into India. Blackstone president Jonathan Gray is a “big believer” in India, he writes in an op-ed in The Economic Times, and the firm will be “accelerating [its] activity” there. India has been one of Blackstone’s top performing geographies globally for private equity, Gray said, and it’s invested more there – nearly $10 billion across PE and real estate – than in any other emerging market. Sectors that stand out? IT and business processing.
The IT Crowd? Leafing through Egypt’s Enigma magazine we were surprised to find some familiar names among the country’s “IT Couples 2019”. Mustafa Abdel-Wadood, former global head of PE at Abraaj Group, and his wife made the grade, as did Shamel Aboul Fadl, founder of Egyptian PE shop Compass Capital. MENA investment company Qalaa Holdings – formerly private equity manager Citadel Capital – had no less than three executives on the list, including co-founders Ahmed Heikal and Hisham El-Khazindar. Other entrants included Aston Villa footballer Ahmed Elmohamady and a host of The Voice Egypt.
Interactive chart fun. As earnings season draws to a close, PEI has revisited its Performance Watch series with updated Q4 data. We have already seen The Carlyle Group and Blackstone this week – keep an eye out for Apollo’s results in today’s daily digest.
In Berlin? Keep an eye out for PEI‘s email@example.com.
He said it
“I fully admit that I have called an ‘audible’ to be more flexible in 2019. Not surprisingly, that decision has raised some eyebrows with a lot of folks in the investment committee.”
Mixing sporting metaphors, KKR’s Henry McVey takes “another swing at the plate” to answer the barrage of follow-up questions on his 2019 outlook, which urged investors to be flexible in asset allocations to benefit from periodic dislocations.
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