CPPIB Canadian general partner Q4 2007 performance numbers

It has been 20 weeks since the end of the fourth quarter of 2007, and we are now able to have a look at the CPP Investment Board GP results for the December quarter.

This post covers the Canadian general partners that have been lucky enough to receive a limited partner commitment from the CPPIB. For the fourth consecutive quarter, Canada’s very own national pension fund didn’t make a single new direct formal commitment to a Canadian general partner (Buyout, Venture, Venture Debt or Mezannine).

The CPPIB team did commit, however, to sixteen U.S. and international GPs during 2007. When you ask yourself why Canada is living through a venture capital crisis (see prior posts “Deloitte’s study on Canadian VC Crisis is well-timed“, December 6-07 and “Ontario politicians asked to address deteriorating VC climate part 2” October 26-07), remember that 16-0 scorecard.

The stand for the year was FountainVest China Growth Fund, which received a $1.5 billion commitment from our pension plan. To put that figure in context, in 2007 CPPIB has committed almost as much capital to a single China fund as it has to the entire Canadian fund industry during the past decade. [June 2nd NTD: Whoops. Bad research on my part. I totally missed the Yen currency note. Apologies, and thanks to readers who pointed it out.]

Canadian GPs (inc. PE, Debt, VC and Fund of Fund) have received aggregate commitments of $2.161 billion since 2000. One China fund almost swamped us with the single stroke of a pen, and they don’t even have a website up and running.

As Roger McNamee told the audience yesterday at the CVCA Annual Meeting: “this century belongs to China”. Little did he know that Canadians apparently have more faith in the Chinese economy than their own.

If you are a regular visitor to the site, you’ll know that we’ve previously pulled the figures showing the performance results that the Canada Pension Plan Investment Board is receiving from its GP relationships (they’ll want me to remind you that’s calendar Q4, not CPPIB’s fiscal Q4).

The figures that follow cover four categories: CPPIB’s commitment, paid-in-capital (which tells you how much of the fund is invested in deals and/or drawn to pay management fees) reported value, and reported value + distributions (which tells you what the notional simple return of the fund is against the paid-in-capital figure). That figure is based in large part on what the manager believes the portfolio is worth as at December 31, 2007, subject to GAAP fair value accounting. MM means millions.

As we’ve done in the past, I’ve added our own Fund II returns (as at Q4/07) as they get muddled when included as part of the CPPIB Legacy fund of fund program that committed $10 million in December 2004 (back when Edgestone ran the program for CPPIB) to our $83MM Wellington Financial Fund II. Fund II ceased pursuing new transactions in August 2006 with the first closing of our $125.9MM Fund III that month (CPPIB doesn’t have $ in our Fund III via TD’s VC fund-of-fund program):

Canadian Venture Funds

Celtic House VP Fund II (2002 US$):
$13.5MM, $12.7MM (94.1%), $11.3MM, $21.9MM (+72.4%)

Celtic House VP Fund III (2005):
$50MM, $17.6M (35.2%), $12.8MM, $12.9MM (-26.7%)

Edgestone Venture Fund (2000):
$50MM, $44.6MM (89.2%), $10.8MM, $50.6MM (+13.5%)

Edgestone Venture Fund II (2004):
$50MM, $35.8MM (71.6%), $33.2MM, $33.2MM (-7.3%)

MDS Life Sciences Technology Fund II (2002):
$200MM, $101.3MM (50.7%), $49.9MM, $93.2MM (-8.0%)

Skypoint Telecom Fund II (2001 US$):
$25MM, $21.2MM (84.8%), $10.3MM, $13.9MM (-34.4%)

TD Capital Legacy VC Fund (2002):
$82MM (originally $100MM), $52.3 (63.8%), $34.2MM, $41.2MM (-21.2%)

Ventures West 8 (2003):
$50MM, $32.8 (65.6%), $27.3MM, $27.6MM (-15.9%)

Wellington Financial Fund II (December 2004):
(CPPIB participated in our $83MM Fund II via a $10MM commitment by the Legacy VC Fund)
$83MM fund size, $56.3MM (67.9%), $9.5MM, $70.7MM (+25.6%)

Canadian Buyout Funds

Birch Hill Equity Partners III (2005):
$85MM, $35.4MM (41.6%), $35.2MM, $38.4MM (+8.5%)

Edgestone Equity Fund II (2002):
$100MM, $77.9MM (77.9%), $53.9, $111.2MM (+42.7%)

Edgestone Equity Fund III (2006):
$100MM, $39.6MM (39.6%), $38.4MM, $42.4MM (+7.1%)

Kensington Co-investment Fund (2002):
$40MM, $39.9MM (99.8%), $55.4MM, $60.0MM (+50.4%)

Onex Partners (2003 US$):
$150MM, $127.3MM (84.9%), $182.1MM, $342.7MM (+169.2%)

Perseis Private Equity (2002):
$75MM, $56.4MM (75.2%), $37.7MM, $47.5MM (-15.8%)

TD Capital CFOF Legacy Buyout (2002):
$121MM, $90.4MM (74.7%), $84.2MM, $110.5MM (+22.2%)

Tricap Restructuring Fund (2001):
$150MM, $150.9MM (100.6%), $72.1MM, $213.1MM (+41.2%)

Tricap II (2006):
$300MM, $204.5MM (68.2%), $109.5MM, $198.7MM (-2.8%)

Tricap’s 2006 fund has put out a tremendous amount of capital in Q4, jumping from 33% of their capital drawn to a whopping 68%. Time to raise a new fund.

Over at Celtic House, it was nice to see that the swings in the share price at Sandvine (SVC:TSX) didn’t hurt the returns on their Fund II.

MRM