The CPP Investment Board has made its second big move in the secondaries market this year, selling 25 limited partner stakes in North American and European private equity buyout funds to CVC and Ares Management. The C$1.2 billion deal is a significant win for the two firms, which have been expanding their capabilities in the secondaries space. A Systematic Approach
CPP Investments has been acting as a systematic buyer and seller in the secondaries market for several years, and the firm’s managing director and head of secondaries, Dushy Sivanithy, says that this transaction was undertaken as part of the fund’s active portfolio management activities. “ As a systematic buyer and seller in the secondaries market, we see this sale as an attractive opportunity to optimize the construction of our portfolio,” said Sivanithy. The Fund’s Portfolio
The CPP Investment Board is a C$699.6 billion pension fund with a significant private equity investment portfolio. According to the fund’s 2024 annual report, private equity investments totaled C$151.2 billion, with returns of 9.6% and 14.1% annualized over the past one and five years, respectively. The Fund’s focus on private equity has been gaining traction in recent years, with the pension fund committing 167 million euros to a secondaries fund from AXA Investment Managers in the third quarter of fiscal year 2025. This deal gave the fund indirect exposure to 12 buyout funds and provided new capital for North American and European buyout transactions. A Growing Market
The secondaries market has been growing rapidly in recent years, with private equity firms holding their portfolio companies for longer and longer periods of time. As a result, limited partners have been increasingly turning to the secondary market to offload their stakes. According to CPP Investments, the transaction included various primary commitments and secondary purchases made by the fund more than 10 years ago. This highlights the fact that the secondary market is not just a recent development, but rather a long-standing part of the private equity ecosystem. Examples of secondaries transactions include:
• The sale of a private equity fund’s stake in a portfolio company to another private equity firm or a sovereign wealth fund. • The purchase of a private equity fund’s stake by a new investor, such as a pension fund or a family office. The Benefits of Secondaries
The secondaries market offers several benefits to limited partners and private equity firms. It allows them to:
• Optimize their portfolio construction by selling underperforming assets and buying into better-performing ones. • Gain exposure to new investments and new strategies through secondary purchases. • Reduce their risk by selling off assets that are no longer aligned with their investment objectives. A Growing Ecosystem
The secondaries market is growing rapidly, with more and more private equity firms and pension funds engaging in secondaries transactions. This is driven by the increasing demand for secondary assets, as well as the growing complexity of the private equity market. As CPP Investments continues to expand its capabilities in the secondaries space, it is clear that the market is becoming an increasingly important part of the private equity ecosystem. CPP Investments sold limited partner stakes in 25 North American and European private equity buyout funds to CVC and Ares Management.
“As a systematic buyer and seller in the secondaries market, we see this sale as an attractive opportunity to optimize the construction of our portfolio,” said Dushy Sivanithy, managing director and head of secondaries at CPP Investments.
The CPP Investment Board is a C$699.6 billion pension fund with a significant private equity investment portfolio.
- The Fund’s focus on private equity has been gaining traction in recent years.
- The Fund committed 167 million euros to a secondaries fund from AXA Investment Managers in the third quarter of fiscal year 2025.
- The deal gave the fund indirect exposure to 12 buyout funds and provided new capital for North American and European buyout transactions.
The secondaries market has been growing rapidly in recent years, with private equity firms holding their portfolio companies for longer and longer periods of time. The C$1.2 billion deal is a significant win for CVC and Ares Management, which have been expanding their capabilities in the secondaries space.
The Benefits of Secondaries
The secondaries market offers several benefits to limited partners and private equity firms. Highlights:
* CPP Investments sold limited partner stakes in 25 North American and European private equity buyout funds to CVC and Ares Management. * The C$1.2 billion deal is a significant win for the two firms. * The secondaries market offers several benefits to limited partners and private equity firms. Definition:
Secondary market: A market where existing investments are sold to new investors, often at a discount to the original purchase price. Key Points:
The CPP Investment Board sold limited partner stakes in 25 North American and European private equity buyout funds to CVC and Ares Management.
By expanding its capabilities in the secondaries space, CPP Investments is well-positioned to take advantage of the growing demand for secondary assets.
