Details of CPP Investments’ live portfolio sale have emerged, after its global head of private equity previously indicated the Canadian pension giant would seek to cut exposure to older funds this year.
CPPIB – the world’s third-biggest investor in private equity per affiliate title Private Equity International‘s latest Global Investor 150 ranking – is shopping a portfolio of fund stakes, five sources familiar with the matter told Secondaries Investor.
Evercore is understood to be advising on the sale, two of the sources said. The process is being shopped under the name Project Ember, Secondaries Investor understands.
Exposure of around $3.5 billion of net asset value was brought to market, two of the sources said. Bids are understood to have been due around mid-February.
The portfolio consists of 56 lines across 26 GPs, according to one of the sources. The top 25 lines are equal strips of $100 million, with CPPIB looking to offload anywhere between 5 percent and 75 percent of its fund ownership with these strips.
The portfolio comprises buyout fund stakes, ranging from mega to mid-market buyout, the source added.
Speaking at PEI Group’s NEXUS conference this year, CPPIB’s global head of private equity Caitlin Gubbels said the pension would seek to sell off what it sees as tail-end exposure within its private equity portfolio. There’s “been an aging of these private equity portfolios” given liquidity challenges and a lack of distributions back to LPs, she added.
“When we’ve run the analysis around year eight of a private equity fund, if you’re an IRR-focused investor, you begin to erode a little bit of alignment with the GP and, frankly, a little bit of alpha,” Gubbels explained. “Where we’ll look to use secondaries this year is trimming some of that older exposure in order to create room for new dollars invested today.”
CPPIB shopped a tail-end private equity portfolio valued as much as $1.1 billion early last year, Secondaries Investor reported at the time. It is unclear whether the transaction concluded.
The pension also executed two transactions in 2023. It offloaded a portfolio to Ardian, which included 20 fund interests mostly in North American and European buyout funds. The sale generated approximately C$2 billion ($1.45 billion; €1.36 billion) in net proceeds, according to a statement on CPP Investments’ website.
CPP Investments also offloaded an $860 million energy portfolio to Goldman Sachs Asset Management that same year, Secondaries Investor reported at the time. The transaction was structured as a preferred equity deal, according to a source familiar with the matter. PJT Park Hill is understood to have advised on the deal.
CPPIB and Evercore declined to comment.