Canada Pension Plan Investment Board (CPPIB) could benefit from trade tensions between the United States and China by buying Chinese assets at knock-down prices, Reuters reported, citing comments made by CEO Mark Machin. CPPIB, one of the world’s biggest investors in real estate and infrastructure, has 8 percent of its funds invested in China and has said it expects to increase that number significantly in the next few years. “The thing for us is to be patient and look for good opportunities that are arising as a result of market stress and economic stress,” Machin said. “I think we’ll find very interesting opportunities in China over time as this continues.”
Private equity investment in Canada continues to expand, with increasing numbers of investors looking to realize above-average returns. But the pre-acquisition stage can be extremely challenging, especially for general partners who will be actively involved in growing the company to achieve the expected returns. In a PE Hub Canada feature article, Larry Kaumeyer, a CEO who grows and oversees businesses for a PE firm, says GPs can lay the groundwork for a successful investment by combining strategic and financial analysis with a host of soft skills that build trust with owners. He offers several tips in five key pre-acquisition stage areas.
Thomson Reuters Corp is looking to make “substantive” acquisitions to boost its legal and tax units after selling a majority stake in its financial terminal business, CEO Jim Smith said. The news and information provider has set aside US$2 billion for deals, Smith told Reuters in an interview, after raising US$17 billion from selling 55 percent of its Financial & Risk (F&R) unit to U.S. private equity firm Blackstone Group. “We are interested in bigger, more substantive deals,” Smith said. “I wouldn’t expect a string of small, bolt-on acquisitions. We’d rather spend that $2 billion on a handful of deals rather than spread across a couple of dozen.”
Specialist mining investors have found a “buyer’s market” for projects as the mining sector struggles to compete for funding with new industries, Reuters reported, citing industry executives at a conference this week. Smaller mines and developers who previously found capital through retail investors in public markets are increasingly turning to specialist investors such as private equity or companies that seek returns in mining royalties, the executives said. Mines need to replenish their supplies and expand while developers are desperate for funding to better quantify what they have found underground.
Peloton Capital Management, a private equity firm founded by former principals of Ontario Teachers’ Pension Plan, has begun raising its debut fund, PE Hub Canada has learned. The fund, earmarked for long-term investing in mid-market companies in North American financial services, healthcare and consumer sectors, is targeting $400 million to $600 million, people with knowledge of the matter said. In a statement, Peloton said the fund has already been anchored with a $150 million commitment. The capital was supplied by Stephen Smith, CEO of First National Financial Corp, a Canadian mortgage lender. Bank of Montreal, CIBC, Royal Bank of Canada and TD Bank Group also intend to make commitments.
TIG Advisors this week said it has bought a piece of Canadian mortgage investor Romspen Investment Corp, marking the first time it has taken a stake in another hedge fund, Reuters reported. Romspen, a Toronto-based credit manager, invests $2.5 billion in assets, providing first mortgage bridge lending to commercial real estate projects in North America. Romspen’s management team, led by Mark Hilson and Wes Roitman, will continue to run the firm. New York-based TIG, founded nearly 40 years ago by Carl Tiedemann, oversees roughly US$3 billion in assets and plans on making more investments in other alternative managers.
Johnson Controls International Plc is nearing a deal to sell its power solutions business, which makes car batteries, to Brookfield Asset Management for between US$13 billion and US$14 billion, sources told Reuters. The transaction would be one of the largest leveraged buyouts this year and allow Johnson Controls to focus on its building technologies and solutions business. Brookfield, a Canadian investment firm, outbid buyout firm Apollo Global Management LLC in an auction for the power solutions unit, the sources said. Brookfield and Johnson Controls could finalize the terms of a deal for the unit, whose batteries are used in about a third of cars globally, as early as this week.
Canadian long-term private equity firm Altas Partners has agreed to buy U.S. commercial-roofing contractor Tecta America Corp, according to a news release. Terms weren’t released for the deal, which is expected to close in Q4 2018. The seller is ONCAP, the mid-market arm of Canadian PE firm Onex Corp. ONCAP acquired Tecta two years ago for US$280 million from Oaktree Capital Management. Based in Rosemont, Illinois, Tecta was created in 2000 with the merger of 10 roofing companies. It represents Altas Partners’ third platform deal this year and the fifth investment of Altas Partners Holdings LP, which raised US$1 billion in 2016.
Tricor Pacific Capital, which for nearly two decades operated as a North American private equity investor, has returned to the market as a family office. The new Tricor, led by Managing Partner Rod Senft, who co-founded the PE firm in 1996, was officially unveiled this week. Its goal is to invest Senft family and partner capital in food and industrial businesses, as well as real estate projects. The Vancouver family office comes three years after the former Tricor rebranded its fifth institutional fund, Tricor Pacific Capital Partners Fund V, an event that paved the way for the PE firm's successor, Parallel49 Equity.
Japanese conglomerate Toshiba Corp is considering liquidating its U.K. nuclear unit NuGen, sources told Reuters, leaving Britain to seek alternatives for a project that was meant to provide 7 percent of the country’s electricity. The move comes as Toshiba believes talks to sell the unit have dragged on too long, the sources said. Korea Electric Power Corp (KEPCO) was initially the preferred bidder, but lost that status in July. Toshiba then negotiated with Canada’s Brookfield Asset Management, but the talks fell through. The NuGen project in Moorside, northwest England, faced setbacks after Toshiba’s nuclear arm Westinghouse went bankrupt last year.