In a curious move, CPP Investment Board muddies website clarity

You’ll usually find the CPP Investment Board (“CPPIB”) to be at the vanguard of transparency and disclosure when it comes to Canadian pension funds. But, in a strange twist, they’ve recently changed how they display the returns of their general partners. Since the site was first built, CPPIB packaged their general partner commitments and return data by geographic categories: Canada, U.S.A., Europe and Asia. Canada, as the home nation, came first.

During recent days, they’ve made an odd change. No longer can you glance at the site by these geographic baskets: it’s all now alphabetical order. Why?

Over the past 18 months, we’ve made it a practice to outline the CPPIB’s commitment to Canadian fund managers, or lack thereof. It was easy to track this absence of new capital for our home market, of course, when every Canadian GP was listed as a group. Modest list though it may be.

We’ve poked more than a bit at the CPPIB’s decreasing interest in Canadian venture capital (see prior posts “CPPIB Canadian general partner Q2 2007 performance numbers” November 16-07, “CPPIB Canadian general partner Q4 2007 performance numbers” May 30-08 and “CPPIB Canadian general partner Q2 2008 performance numbers” November 22-08), and this has caused a bit of a stir in some corners of VC-land. As you can imagine, no one ever discusses the state of the Emperor’s clothes. At least not in public. And not when they are one of the largest LPs in Canada, and a key client of TD Private Equity Investors (formerly known as TD Capital Private Equity Partners); one of the few doors that are open to Canadian-based funds such as ours.

But as Canada’s venture capital crisis accelerated over the past 36 months, I believe that we need to talk about every element of the situation. There should be no sacred cows.

And one key driver of the VC crisis has been CPPIB’s decision to no longer directly back Canadian VC general partners with $50 million-ish lead commitments. In 2003-04, for example, they’d have been the lead limited partner at Celtic, Edgestone and Ventures West to name but three. Today, every VC fund in Canada is redirected to CPPIB’s outsourced Fund of Funds manager, TD Capital Private Equity Partners Investors. Where the commitments generally look more like $10-$15 million, not $50 million, if you can get one…that is.

Over the past week. two of the very senior leaders of 30 year-old Ventures West announced their retirement. CPPIB was the lead investor ($50MM) on the 2003-vintage VW VIII, the fund that they are currently investing. With CPPIB no longer doing directs in Canada (unless you’re Onex), one can imagine the impact this may have had on the excellent and storied team at VW.

And now, suddenly, it is even hard to compare the quarterly commitments that CPPIB is making by region; whether or not you agree that every foreign fund commitment is at the expense of Canadian early stage companies and our Innovation Economy.

Since the CPPIB first began to publish the data (see prior post “CPP Investment Board GP performance numbers” July 18-07), Canadian GPs have had their own category. Making it very easy to see how small their commitment to Canada was, as compared to Blackstone, for example.

Someone, somewhere, decided that this wasn’t the way to go. That since the site was first constructed, they’d been going about it all wrong. That Canadian pensioners and taxpayers really want to see the hundred plus GPs that have attracted capital from CPPIB listed alphabetically, and not by geographic region, the way most mutual funds list their stocks, for example.

Curious.

MRM