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British Columbia pension shops PE portfolio

  • Portfolio valued at $250 mln to $500 mln: sources
  • Includes two TPG funds
  • System has been building up direct investment capabilities

British Columbia Investment Management Corp is selling a portfolio of private equity fund stakes valued between $250 million and $500 million, two sources told Buyouts.

The portfolio includes stakes in some large buyout funds, including two TPG funds, one of the sources said.

A spokesman for BCIMC declined to comment. The system is not using a secondary adviser on the deal.

BCIMC, a pension fund manager, has been working to build up its co-investment capabilities and increase in-house asset management. As part of that it’s been divesting fund commitments from what it considers non-core relationships.

The system previously sold off 20 fund investments that it no longer considered aligned with its strategy, according to its 2017-2018 annual report.

BCIMC committed $3.4 billion to private equity for the year ended Dec. 31, 2017, the report said. That broke down to $2.5 billion in fund commitments to 13 external managers and $950 million to co-investments, the annual report said.

Portfolios of LP stakes continue to lead activity volume in the secondary market, even as GP-led deals take up more of the market. Earlier this year, Buyouts reported that Norinchukin Bank is selling a portfolio valued at around $5 billion to Ardian. A large portion of the portfolio was uncalled fund stakes, meaning the buyer did not have to put up the bulk of the cash right away.

Meanwhile, Public Sector Pension Investment Board, another Canadian pension system, was selling a private equity portfolio valued at more than $1 billion earlier this year, Buyouts previously reported.

Total secondary-market deal volume in 2018 came in around $75 billion, including real estate and infrastructure assets, a year-end report from UBS shows. Total PE secondary volume was estimated at $67 billion, UBS said.

Action Item: Check out BCIMC’s annual report here: https://bit.ly/2ZxlnvF