Just happened
CPP’s fund fanatic
The world’s second-largest private equity investor is getting a leadership shake up. Caitlin Gubbels, a 14-year veteran of CPP Investments who currently serves as its head of private equity funds, will succeed Suyi Kim as global head of private equity in October, per a statement. Kim is leaving to pursue “new global investment leadership opportunities” and will remain with CPPIB until November. More details here.
Gubbels is inheriting a gargantuan private equity portfolio, accounting for 31 percent of CPPIB’s assets under management of C$632.3 billion ($461.4 billion; €419 billion) as of 31 March. The institution’s conviction in the asset class has paid off, generating a 13.9 percent five-year net return and contributing 52 percent of the fund’s total returns over that period. CPPIB recorded a 10.4 percent net return in fiscal year 2024, which it attributed to “gains achieved through external fund realisations, portfolio company divestments and improved portfolio company earnings”.
Gubbels’ pedigree in funds, rather than directs, could tell us something about the institution’s priorities. One former colleague tells Side Letter that Gubbels is expected to maintain a close connection with the funds side, potentially shifting the “balance of power back to funds” after a strong focus on directs in recent years. The source described Gubbels as “tough”, “pragmatic” and “good at managing relationships with GPs”.
CPPIB has established itself as one of the world’s most enthusiastic direct investors, with co-investments and directs accounting for roughly half of its private equity portfolio, Kim told Private Equity International last year. As a result, the institution has been careful not to paint itself as a potential rival to managers. “We don’t compete with our GPs,” Kim said at the time. “We like to partner with them on the direct side. More than half of the portfolio that we invested in… we partnered with our GPs.”
Gubbels’ expertise in handling such relationships should, then, prove very handy.
EQT’s APAC aspirations
EQT Private Capital Asia has launched its ninth Asia flagship with a $12.5 billion target, according to a statement. While a hard-cap is yet to be determined, Fund IX’s target would be about 12 percent larger than its predecessor, which closed on $11.2 billion in September 2022. Fund IX’s investment strategy will be “materially in line with the predecessor fund”, according to the statement. Partner Hari Gopalakrishnan told PEI earlier this year that Fund VIII had completed nine buyouts as of March, of which four were in India.
EQT’s latest offering is the largest Asia-focused fund in market as of 15 August 2024, according to PEI data. Other major players in market include PAG, which had initially sought $9 billion for PAG Asia Capital IV; MBK Partners, which is targeting $7 billion for its sixth flagship; and Carlyle, which hopes to raise $6 billion for Asia Partners VI. The largest Asia-focused PE close to date was China Reform Fund Management Corporation’s $15.4 billion CVC Fund in 2016, followed by KKR’s fourth Asia fund on $15 billion in 2021, and Hillhouse‘s fifth flagship on $13 billion in the same year.
Asia-focused funds raised $29.4 billion in the first half of 2024, according to PEI’s H1 2024 Fundraising Report. The region accounted for just 7.2 percent of global inflows, down from 14 percent in 2021.
EQT’s 2019-vintage Baring Asia Private Equity Fund VII had generated a 1.63x TVPI and 24.6 percent IRR as of 31 December, according to PEI performance data, citing public pension sources. It had already delivered a 0.70x DPI. Subscribers can find more performance data here.
Essentials
Triton’s realisations
Europe’s Triton Partners has now fully exited all investments from its 2009-vintage fund, Side Letter understands. Triton Fund III delivered a 2.2x DPI, according to a source with knowledge of the matter. LPs in the €2.4 billion vehicle included CPP Investments, Maryland State Retirement and Pension System and Employees Retirement System of Texas, PEI data shows.
Notable exits included automotive and industrial supplier Stabilus, which generated a 5.7x MOIC and 48 percent IRR; DSI Underground, a supplier of technologies for underground mining and tunnelling (5.9x and 21 percent, respectively); and Seves, a provider of specialised electrical glass insulator solutions, which was sold to Blackstone in June to deliver a 9.4x MOIC and 28 percent IRR.
The London-headquartered firm made six exits this year, including Ambea, Bormioli Pharma and RENK, the source added. These exits represent €2.3 billion in value and a 5.1x aggregate gross MOIC. The firm is targeting €5.5 billion for its sixth flagship offering, according to PEI data. It will pursue industrial, business services and healthcare sectors across Germany, Austria, Switzerland and the Nordic regions. Triton declined to comment.
Have EU heard?
Invest Europe published on Friday new figures regarding the continent’s private equity and venture funds. Here are some key findings:
- Capital under management reached €1.15 trillion across 2,996 firms last year, up 9 percent from 2022-23.
- PE and VC dry powder reached a record €410 billion, representing about 86 percent of the investment total of the past four years. Dry powder in UK-focused funds was the largest at €203 billion, followed by France and Benelux at €89 billion.
- Buyout funds accounted for the largest share, both in dry powder (€284 billion) and capital under management (€442 billion).
- Pension funds were the largest contributor of uncalled commitments (27 percent) for 2023, followed by funds of funds and other asset managers (18 percent), sovereign wealth funds (13 percent), and family offices and individuals (also 13 percent).
