CANADA - The C$11bn (US$7bn) Canada Pension Plan Investment Board (CPPIB) has acquired a 10% interest in the merchant bank, NB Capital Partners, and awarded it three mandates worth a total of C$180m (US$113m).
The CPPIB will pay C$18m (US$11.3m) for its 10% stake in the firm. The C$180m that it has awarded NB Capital will be committed to private equity, venture capital and mezzanine debt funds.
Additionally, the CPPIB has a four-year option to increase its ownership in the firm to 17%. To exercise that option, the CPPIB would have to commit an additional C$185m (US$116.5m) to funds managed by NB Capital Partners.
Founded in 1999, NB Capital was a subsidiary of the National Bank of Canada before a management buyout. Should the CPPIB increase its stake to 17%, it would be an equal shareholder with National Bank, whilst management would hold the remaining shares.
Mark Weisdorf, CPPIB vice president - private market investments, said of the deal: “The investments are consistent with our mandate of seeking above average returns. We selected NB Capital Partners based on their performance record, their experience in the market and their family of funds’ approach.
To date, the CPPIB has committed C$740m (US$465.8m) to private market investments, equivalent to 7% of its total assets. In June, the CPPIB announced it would ultimately invest up to 10% of assets in private equity.
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