The C$536 billion ($396 billion) Canada Pension Plan Investment Board (CPP Investments) has invested or committed about $1.2 billion to Asian funds and companies in the quarter ended December 31, 2022, per an announcement this month.
The pension fund said that it committed $300 million to the fifth Asia fund of global private equity firm Bain Capital and another $100 million to the Baring Private Equity Asia EQT Mid-Market Growth Fund during the quarter.
Bain Capital filed with the US Securities and Exchange Commission to raise its fifth Asia fund in December 2022, which was reported to be targeting $5 billion. The buyout firm closed its predecessor fund at $4.65 billion in 2018.
Meanwhile, BPEA – after its merger with Swedish group EQT – is understood to target a mid-market strategy as its flagship series invests in large-cap businesses in Asia. EQT has already been investing in the mid-cap space in the region.
BPEA closed its eighth flagship fund at $11.2 billion last September. A month later, EQT completed its acquisition of the Hong Kong-based private equity manager.
CPP Investments also become an anchor investor in the $600-million IndoSpace Logistics Park IV, a real estate vehicle managed by India-based real estate company IndoSpace. The pension fund committed $205 million to the vehicle.
CPP said it has made several other commitments and investments in Asian companies alongside its portfolio general partners, including business and corporate services firm Tricor Group and $40 million in Malaysian entity engagement software provider Viewpoint Software (with BPEA EQT); $78 million in Chinese poultry meat product manufacturer Shandong Fengxiang (with PAG Asia Capital); and $53 million in Indian wealth and asset management firm IIFL Wealth (alongside Bain Capital Asia).
The Canadian pension fund also provided sponsorship across capital structures for an investment in Hong Kong-based biochemical company EcoCeres Inc as well as committed an additional C$322 million to the Japanese Data Centre Development venture with Mitsui & Co Ltd, which was established in 2021.
Separately, CPP has backed two global funds by General Atlantic and Sequoia Capital, which have extensively invested in the Asia-Pacific.
The pension fund said that by the end of its third financial quarter, it had achieved five-year and 10-year annualised net returns of 8.1% and 10%, respectively.
“Our diversified portfolio delivered gains this quarter due to a rebound in public equity markets, while our private asset values remained relatively flat,” said CPP Investments president and CEO John Graham, predicting that market pressures will continue to persist in 2023.
The pension fund’s private equity business in Asia spans direct investments to funds and secondaries.
For funds, it makes multi-year commitments to pan-Asian and country-focused funds in China, Japan, Korea, India, Southeast Asia, and Australia, with a minimum fund size of $500 million and a minimum commitment of $75 million.
In terms of secondaries, CPP typically acquires limited partnership interests of at least $25 million and direct secondaries at a minimum of $100 million.