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Canada Pension gobbles up HM Capital food portfolio, launches new PE fund

5 Mar 2013

canada dollarThe $172bn Canada Pension Plan has launched a new private equity fund to target the food sector amid buying a portfolio of food-centric assets from Texan private equity firm HM Capital for $468m.

CPP has committed $138m to newly-formed Kainos Capital Partners, which will be managed by the food and consumer products team of HM Capital.

The firm will also continue to manage its former portfolio assets on behalf of CPP following the sale.

CPP Investment Board senior vice-president André Bourbonnais said, “We are excited to complete another significant and innovative transaction in the secondary private equity market.

“This was a unique opportunity for us to partner with one of the most successful food investment franchises and purchase a portfolio of well-managed quality food companies, each with market-leading positions.”

Bourbonnais said CPP was one of the largest and most active participants in the secondary private equity market, investing more than $5bn in the past five years.

He said, “We expect to deploy significant amounts of additional capital in this market over the next five years.

“We will continue to leverage our comparative advantages as a long-term investor with deep internal capabilities to provide solutions to complex transactions.”

Last month the institutional investment giant revealed it made a gross return of three per cent for the quarter ending 31 December 2012 while growing its net assets by $2.5bn.

The pension fund ended the third quarter of its 2013 fiscal year with net assets of $172.6bn according to its annual results, thanks to an extra $5bn of investment income and $2.4bn of seasonal cash outflows in the quarter.

CPP said that over the first nine months of the fiscal year it had a gross investment return of 5.5 per cent and $2.4bn in net contributions.

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