TORONTO The in-house private equity unit of the C$100 billion (US$85.14 billion) Ontario Teachers Pension Plan is going global.
In February, the group Teachers Private Capital opened a London office from which it will make direct private equity investments in companies in Europe and possibly Africa, rather than investing with private equity partners or in funds, according to Jim Leech, senior vice president and head of Teachers Private Capital.
Were a private equity business and infrastructure business inside of a pension plan, Mr. Leech said. Who are our competition? TPG, Bain and KKR; not CalPERS or CalSTRS.
Teachers Private Capital, which has C$15 billion in assets under management, makes direct investments in portfolio companies, either on its own or with a list of 12 investment partners with which it co-invests.
No U.S. pension fund has taken this route. Most U.S. institutional investors have been keeping their staffs relatively small, relying on consultants and gatekeepers to invest mainly in funds and some co-investment with private equity general partners, private equity consultants say. But in six years, Teachers Private Capital has increased staff to 62 people from 10.
Teachers Private Capital bought a company outright for the first time three years ago.
Some of the other (Canadian pension funds) are active in co-investment but do not take transactions 100% on their own, Mr. Leech said.
The C$207.9 billion Caisse de Depot et Placement du Quebec, Montreal, had established 11 global offices in an effort to attract investment dollars from foreign pension funds. It has since narrowed that range, but still has an office in New York, servicing its international equity group, and offices in Shanghai, Madrid, Brussels and Luxembourg that support its real estate team, said Annie Vallières, spokeswoman.
Like Teachers Private Capital, Caisse de Depot makes direct investments; about 79% of its C$16.8 billion private equity portfolio consists of direct investments negotiated with publicly traded or privately held companies.
The e209 billion ($275.9 billion) Stichting Pensioenfonds ABP, Heerlen, Netherlands, also has a global presence with an office in New York. In July, ABP spun off its New York-based hedge fund team into a separate fund-of-funds company, New Holland Capital.