CDPQ to Expand In-House Private Equity Team

Pension aiming to cut outside PE costs, boost Singapore office.

Canada’s C$298.5 billion ($228 billion) Caisse de dépôt et placement du Québec

(CDPQ) is cutting out the middle men for private equity buyouts as it seeks to boost its investing team.

In the past, the pension fund has utilized private equity firms for leveraged corporate buyouts, but as the firms tend to buy companies as a short-term investment before passing them off for a profit, the CDPQ is more of a long-term investor. Reuters reports that this makes investments from CDPQ more attractive to these companies.

“These are interesting (opportunities) because typically these entrepreneurs or corporates didn’t want to partner with standard private equity firms,” Stephane Etroy, CDPQ’s head of private equity, told Reuters. She added that the fund aims to hire staff who previously worked for private equity firms.

The giant Canadian pension fund wants to increase staff in its Singapore office, growing the private equity office to more than 10 for direct investing.

Although larger pension funds and sovereign wealth funds tend to lock up with private equity firms for corporate acquisitions (known as co-investments), CDPQ now makes two-thirds of its private equity investments in-house.

Etroy could not be reached for comment.

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