CPPIB plows at least US$5B into private equity in three months

financialpost.com:

Canada Pension Plan Investment Board poured at least US$5 billion into private equity in the last three months of 2024 as the asset class regained appeal.

The pension fund made 26 transactions in private equity — most of which were co-investments or fund commitments — in the fiscal quarter ended Dec. 31, according to Bloomberg calculations. Some investment sizes weren’t disclosed, and the fund announced no exits during the same period.

Canada’s largest pension notched a 3.8 per cent gain in the quarter, driven by returns in private equity and credit. The gains were offset by losses in fixed-income assets, which were affected by higher U.S. Treasury yields.

Net assets hit nearly $700 billion, a milestone reached five years ahead of initial projections by the Office of the Chief Actuary of Canada.

“Our investment teams were very active, with more than 40 transactions signed or closed in the last three months of the calendar year,” chief executive John Graham said in the statement.

The investments included a 24.5 per cent stake in video-game provider Keywords Ventures Ltd. and committing US$700 million to a private equity fund managed by EQT Private Capital Asia. CPPIB also plans to contribute about US$1 billion to the proposed merger between Novolex and Pactiv Evergreen Inc., two packaging companies.

Investors have begun allocating more to private equity strategies than private debt, according to iCapital, which has more than US$200 billion in alternative assets on its marketplace for money managers. That shift suggests a bet on a lower interest rate trajectory and a more favourable market for initial public offerings, the firm’s chief executive Lawrence Calcano said at the end of last year.

Bloomberg.com