CPPIB Leads Global Pension Funds With $144B Allocated to Private Equity

The Canada Pension Plan Investment Board made the largest allocation to private equity of any pension fund during the first 10 months of the year, with $143.86 billion—which made up 24.6% of its portfolio—allocated to the asset class, according to S&P Global Market Intelligence data. The 20 pension funds with the largest allocations have committed a combined $707.6 billion to private equity, through the end of October

The California Public Employees’ Retirement System was a distant second with $83.5 billion—16% of its portfolio—allocated to private equity investments, followed by the California State Teachers’ Retirement System at $53.70 billion—15.5% of its portfolio. Rounding out the top five were the Washington State Investment Board at $47.89 billion—29% of its portfolio—and the New York State Common Retirement Fund at $39.08 billion—14.6% of its portfolio.

Australian superannuation fund Aware Super Pty Ltd. had the largest allocation to private equity outside of North America at $32.15 billion—26.5% of its portfolio, ranking seventh, just ahead of Saudi Arabia’s Hassana Investment Co. at $32 billion—10% of its portfolio.

Among the 20 largest allocators, the fund that committed the largest percentage of its portfolio to private equity was California-based health care company Kaiser Permanente, with $28.61 billion—49.9% of its portfolio.

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Blackstone was the most-preferred private equity fund manager among the pensions and accounted for the most private equity funds in the portfolios of CalSTRS, the State of Wisconsin Investment Board and the Minnesota State Board of Investment. TPG Capital LP, the second most popular manager through October, was the top fund provider for the Washington State Investment Board and the Teacher Retirement System of Texas.

CVC Capital Partners was the largest private equity fund manager for CPPIB in terms of the number of funds invested at 14, which includes CVC European Equity Partners IV LP, CVC Capital Partners Asia Pacific IV LP, CVC Capital Partners VII LP and CVC Capital Partners Strategic Opportunities II. The pension fund has committed a total of $5.67 billion to CVC’s funds, as of October 29. Additionally, buyout funds accounted for more than half of the funds to which CPPIB has committed capital—nearly four times as many as its next-most-used fund strategy.

More generally, global private equity-backed funding activity slowed in October, according to S&P Global Market Intelligence data. The number of venture capital deals declined 24% year-over-year to 1,151. In addition, total value came in at $18.80 billion, down 28.7% from the same period in 2023. When compared month-to-month, deal value fell from $20.95 billion in September, as the number of transactions fell from 1,307.

Private equity firms are optimistic about an improved fundraising environment but are not sure when that will happen, S&P wrote, citing recent earnings calls by CVC and Blackstone.

“We believe the market backdrop does remain challenging,” Rob Squire, a managing partner in CVC Capital Partners and its global head of client and product solutions, told analysts during its September 5 earnings call. “Many clients remain in what we would call a wait-and-see mode, given a combination of geopolitical uncertainty, market volatility, and, of course, continued questions around interest rate movements.”

Squire added that the “environment does make it harder to gain momentum, often requiring longer fundraising processes.”

However, Blackstone President Jonathan Gray said the private equity market is turning a corner.

“We believe some of the best investments are made during times of uncertainty,” Gray said during the private equity giant’s third quarter earnings call. “Institutional investors are certainly feeling better.”

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