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PE rethinks NAV loans as investors push back

Private Equity Wire

Buyout firms have long relied on controversial loans backed by equity stakes to enhance fund returns, but growing investor criticism has triggered a slowdown, according to a report by Bloomberg UK. This shift partly reflects a rebalancing of power, enabling LPs in private equity funds, such as pension funds to exert influence over GPs.

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Will OMERS and BCI Drown Along With Thames Water?

Pension Pulse

The company is still in talks with its shareholders about raising as much as £1 billion in fresh funds following a £500 million injection agreed last year. Its largest shareholder is Canadian pension fund Ontario Municipal Employees Retirement System (Omers), which holds a nearly 32 per cent stake.

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Canadian LPs Selling PE Stakes in Higher-For-Longer Environment

Pension Pulse

This occurs when the value of bonds and shares of publicly listed firms decline, as they did recently, bringing down the total assets of a pension fund. Canadian pension funds are among the largest private equity investors in the world. Denominator effect The first is what’s known as the “denominator effect.”

Stakes 59
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CDPQ's Head of PE on Vintage Year Diversification and Managing Liquidity

Pension Pulse

Moving into 2023, he set a goal of reducing the pension’s PE allocation to 18 percent within three years, primarily by selling companies and exiting fund stakes via the secondaries market. These professionals had been trained to spot top private companies and PE funds, rather than to sell their investments.

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The Blackstone Bombshell That Just Shook PE Industry

Pension Pulse

Shannon Rebolledo staked out the parking lot as JBS left and PSSI came in. No pension fund wants to invest in private companies that abuse immigrant children. I used to invest in top global hedge funds back in the day and I trusted nobody. How can this happen? Where did oversight fail?

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Transcript: Mathieu Chabran

The Big Picture

And whilst we were dealing with the same counterparty, the same pension fund, some of their constituents, some of the underlying boards, disagree on the approach to take there. And so at times it’s effectively when the essential is at stake that people can react constructively. How do you look at those?

Banks 59
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CDPQ Posts 7.2% Return in 2023

Pension Pulse

CDPQ's own public equities portfolio saw its performance "driven by growth stocks, as well as by large positions in Quebec companies, which performed well." The private equity portfolio was affected by interest rate hikes as well as by an increase in financing costs, which affected certain private companies.

Returns 59