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Asset AllocationSeptember 12, 2023

NZ Super Acquires 5% Stake in Belgium’s Euroclear

The $38 billion Kiwi pension fund is now the 5th largest shareholder in the securities clearinghouse.

The NZ$65 billion ($38.15 billion) New Zealand Superannuation Fund announced it has acquired a 4.99% stake in Brussels-based securities clearinghouse Euroclear, although it did not reveal how much it paid for the investment.

Euroclear, which provides post-trade services that include transaction settlement, asset servicing and collateral management, has approximately 36 trillion euros ($38.6 trillion) of assets under custody. The Euroclear group includes Euroclear Bank—an international central securities depository—and it operates the national central securities depositories in Belgium, Finland, France, Ireland, the Netherlands, Sweden and the U.K.

Although financial terms of the deal were not disclosed, in May 2022, Intercontinental Exchange Inc. announced that it sold its 9.85% stake in Euroclear to Québecois pension fund Caisse de dépôt et placement and Belgian sovereign wealth fund Société Fédérale de Participations et d’Investissement for 709 million euros. At that valuation, NZ Super’s nearly 5% stake would be worth approximately 360 million euros.

“Euroclear is the leading settlement provider across a number of European and international markets,” NZ Super Head of Direct Investments Will Goodwin said in a release. “It is an attractive, high-performing asset which suits our growth profile and will help diversify our investment portfolio.”

Goodwin said the deal, which makes NZ Super Euroclear’s fifth-largest shareholder, provided a rare opportunity for the super fund to increase its exposure to the global financial services sector.

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KKR, USI Insurance Buy USI Shares From CDPQ

KKR is increasing its equity in the insurance broker and consultant to continue driving long-term growth.

By Noah Zuss

USI Insurance Services LLC announced Monday that shareholder KKR & Co. will increase its equity investment to the insurance broker and consultant by more than $1 billion.

Per the terms of the agreement, KKR and USI will purchase more than half of the shares of USI held by Canadian pension fund Caisse de dépôt et placement du Québec, according to the press release.

KKR is making the additional investment in USI through its core investments strategy, and the transaction is expected to be completed by the end of 2023, the release added.

USI Insurance is co-owned by private equity firm KKR and institutional investor CDPQ, which has C$424 billion ($312.35 billion) in assets. CDPQ and KKR acquired USI in 2017 in partnership with USI’s management and employees, according to the press release.

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“When we embarked on our journey with KKR and CDPQ, we shared a vision about the forces impacting our industry and a plan for USI to be a leading innovator in that transformation, combining world-class sponsorship and investment with our team of experts, differentiated solutions and technology,” Michael Sicard, chair and CEO of USI, stated in the release.

“Our dynamic partnership has unlocked multiple opportunities and USI is well positioned to capitalize on its strengths and to continue creating value for all stakeholders,” said Martin Longchamps, executive vice president and head of private equity at CDPQ, in the same statement.

USI offers insurance brokerage and consulting services in the U.S., providing property and casualty, employee benefits, personal risk, program and retirement solutions to clients. Headquartered in Valhalla, New York, USI has more than 10,000 employees in more than 200 offices.

A representative for USI Consulting Services did not return a request seeking further information on the transaction.

Tags: Caisse de dépôt et placement du Québec (CDPQ), insurance, KKR, Martin Longchamps, Michael Sicard, USI Insurance Services LLC

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