The new head of private markets at Public Sector Pension Investment Board (PSP Investments) is off to a running start after being quietly hired by the system last fall.
Guthrie Stewart, named PSP’s senior vice president and global head of private investments in September, was the pension fund’s point man on January’s proposed buy of AIG Advisor Group, a New York-based broker-dealer network. PSP is partnering with Lightyear Capital in acquiring the business from AIG.
In a statement, Stewart said the Advisor Group deal is in line with PSP’s PE strategy “of making sizable, direct investments in high-quality companies alongside experienced partners.”
Stewart, formerly a partner at EdgeStone Capital Partners, manages PSP’s investments in infrastructure, natural resources and private equity, a PSP spokesperson told Buyouts.
That puts him in charge of some $18.7 billion of assets, including $10.1 billion in private equity, according to PSP’s website. PE investments have a target weighting of 14 percent of PSP’s entire portfolio.
Stewart’s position is new; responsibility for PSP’s private-market portfolios had been divided. Before he was hired, private equity was headed for more than a decade by Derek Murphy, while infrastructure was overseen for almost as long by Bruno Guilmette. Murphy and Guilmette appear to have left these senior divisional posts sometime last year.
PSP did not respond to a request for comment.
In addition to leading a greatly enlarged operation, Stewart will likely focus on finding more deals like Advisor Group. That’s because PSP has given top priority to scaling investment volumes to match up with its fast-growing asset base.
Montréal-based PSP manages the pension savings of Canada’s federal public service, including the armed forces and Royal Canadian Mounted Police. Its capital pool, already one of Canada’s largest at $112 billion, is projected to grow to $150 billion by 2020 and $200 billion by 2024.
PSP reported a gross total portfolio return of 14.5 percent at the end of March 2015, and a five-year annualized return of 11.7 percent. Private equity turned in a one-year return of 9.4 percent, and a five-year return of 15.4 percent.
PSP has a mixed PE strategy, relying on fund partnerships, direct deals and co-investments, according to its website. Directs and co-investments are playing an increasingly important role in the portfolio. Currently making up 40 percent of all PE assets, individual investments are targeted at $100 million to $500 million and held for terms of as long as 10 years.
PSP holds significant direct stakes in several private companies. They include Telesat, a Canadian satellite operator bought in 2007 by the pension fund and Loral Space & Communications for $3.25 billion. Loral has since tried to monetize its stake; however, a US$7 billion bid from PSP and Ontario Teachers’ Pension Plan was reportedly scuppered last year due to financing issues.
Photo of Guthrie Stewart courtesy of LinkedIn
Photo: Alexandre Genest of Canada navigates the water jump in the men’s athletics 3000m steeplechase final during the 2015 Pan Am Games at CIBC Pan Am Athletics Stadium in Toronto, Ontario, Canada. Rob Schumacher-USA TODAY Sports