Caisse de Depot et Placement du Quebec is exploring the sale of as much as $2 billion of private equity assets in the secondary market to free up cash for other investments, according to people familiar with the matter.
Canada's second-largest pension fund manager is scouting the market and may end up selling a smaller stake or not selling at all, depending on the price, the people said, asking not to be identified discussing confidential matters. Evercore is advising on the sale, the people said.
CDPQ, which had C$424 billion (about $307 billion) of assets at the end of June, declined to comment.
Some North American pension plans have maxed out how much they can allocate to private assets after years of piling into the illiquid asset class when interest rates were near zero. What's more, a tough market for deals is making it hard for private equity fund managers to exit investments and return capital to investors.
Limited partners' transactions in the secondaries market totaled $25 billion worldwide in the first half of the year, accounting for 58% of the entire secondaries market, as institutional investors became more active in managing their private equity portfolios, according to Jefferies Financial Group.
CDPQ reported a 4.2% return in the first half of the year, essentially matching its benchmark. Its private equity returns of 1.4% were well below the benchmark of 7.2%, after years of outsize gains.
The pension manager recently sold more than $1 billion in fund stakes to Partners Group and around $2 billion of private investments last year, according to a person familiar with the matter.
British Columbia Investment Management was also mulling the sale of $2 billion in private equity assets, Bloomberg reported in June. This week, Ardian said it bought $2.1 billion of limited partnership interests in 20 private equity funds from the Canada Pension Plan Investment Board.
