CPPIB, Ontario Teachers’, CDPQ among world’s largest private equity LPs

Canada’s pension funds are among the world’s biggest investors in private equity, according to a new report.

Preqin’s The Private Equity Top 100, issued today, found that three of the 10 largest PE limited partners are Canadian.

Sitting atop the list is Canada Pension Plan Investment Board.

CPPIB, which invests on behalf of Canada’s public retirement system, earned the ranking with a current PE asset allocation of about US$44 billion, Preqin said. That’s just ahead of Abu Dhabi’s sovereign-wealth fund, which oversees a pool of about US$40 billion.

Not far behind, in the No. 6 spot, is Ontario Teachers’ Pension Plan. It’s closely followed by Caisse de dépôt et placement du Québec.

Ontario Teachers’ and CDPQ are reported to have current PE allocations of US$21 billion and US$20 billion, respectively. That puts them just behind Singapore’s GIC, California Public Employees’ Retirement System and the Netherlands’ APG.

Several other Canadian pension funds also appeared on the list.

Public Sector Pension Investment Board, Ontario Municipal Employees Retirement System, Alberta Investment Management Corp and British Columbia Investment Management Corp, for example, are ranked among the world’s 50 largest LPs.

Preqin says the 100 largest PE LPs managed an aggregate investment pool of US$791 billion last year. On average, they have a PE allocation of 12.1 percent of total assets and are targeting an overall allocation of 12.5 percent.

Two-thirds of the 100 largest are located in North America. They consist of a wide variety of institutional fund types, with public pension funds accounting for the biggest share (43 percent).

Europe, North America and Asia are the preferred investment locales of the 100 largest PE LPs. They also tend to prefer funds focused on buyout, growth and venture capital opportunities.

Canada’s largest pension funds typically invest in the global PE market through a mix of fund and direct strategies. For many, direct deals account for a growing share of allocations. Directs are done either independently or as co-investments and co-sponsorships alongside fund partners.

Preqin told PE Hub Canada estimates of the current asset allocations of the 100 largest PE LPs reflect a range of direct-fund investment strategies.

The entire Preqin report can be viewed here.

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