Canada Pension Plan (CPP), among the world?s largest investors with assets worth $124 billion under its belt, is investing $100 million in the new private equity(PE) firm floated by Renuka Ramnath, former MD & CEO, ICICI Venture. The PE firm, Multiple Alternate Asset Management, which is expected to raise about $350 million by the end of March, will have CPP as an anchor investor.
The Canadian fund has also made investments in other PE funds including Carlyle, Blackstone, Goldman Sachs, JP Morgan and KKR. When contacted Renuka Ramnath observed that she was in the midst of mopping up money. According to sources, Ramnath, who was earlier with ICICI Venture, is looking to put together a $500-million fund.
The CPP Fund reported assets under management of $123.9 billion at the end of December, 2009 and has committed approximately $33 billion to private equity fund investments, of which more than $18 billion has been invested to date. It has currently a private equity portfolio of more than 140 funds with more than 70 managers.
According to industry sources, this is the first time CPP is investing in a debut fund. ?It?s an achievement that Ramnath has managed to raised $350 million in 8-months time. There are big corporate groups that haven’t been able to close their funds after two years of the launch,” says a senior P/E industry player. Another senior PE partner observes that limited partners are generally careful to check out the track record of the general partner who raises a debut fund. “They scrutinize each deal done by the fund manager rather than which firm the partner worked with,” he says.
During her tenure at ICICI Venture, Ramnath was credited with buyouts like Ranbaxy Fine Chemicals, ACC refractory and VA Tech. Other PE professionals who quit to set up funds on their own include Harsha Raghavan, former MD, Candover India and Ajay Relan, former Indian head of Citi Venture Capital International. Rajesh Khanna, who worked nearly a decade as India head for Warburg Pincus has put in his papers this month and learnt to be setting up his own fund.
Subbu Subramaniam, former partner at Baring Private Equity Partners India is also exploring a new fund. CPP’s assets are handled by CPP Investment Board, a professional investment management organization that invests the funds, not immediately required by the Canada Pension Plan, on behalf of 17 million Canadian contributors and beneficiaries. Headquartered in Toronto, the CPP Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments.