CPPIB Q2 2011 General Partner performance numbers

Here are the stats for some of the high profile GPs that count the CPP Investment Board as a direct limited partner (as at June ’11). Times appear to be very good in PE land, with continued updrafts on the NAV front, despite that fact that valuations in the public sphere are having a tough time. Which begs a question, since the PE world is required by accounting rules to use public comps to value private companies in their portfolios….

Some of the more notable large moves between Q2 2008, Q1 2009 and Q2 2011 are below (vintage year of the fund is in brackets):

– Apollo Inv. Fund V (2002) reported a return drop from 252% to 97%; holding now at +108%

– Apollo VI (2005), with 119% drawn, saw its 26.4% positive return turn into a negative 36%, and has recovered to a positive 32%

– Apollo VII (2007) has drawn 67%, and is up 15% during the past nine months to +35%

-Blackstone IV (2002)’s return fell from +171.6% to 95%; up 11% on the quarter to +145%

-Blackstone V (2005)’s return fell from +7.7% to a loss of 28%; up 6% during the quarter to +6% return overall

– Blackstone VI (2008) is still undrawn on CPPIB’s US$500MM commitment, unlike Apollo’s 2007/08 vintage fund

– First Reserve XI (2006) has invested 85%, and is up +11%

– First Reserve XII (2008) has put out 59% of their 2008-vintage year fund, and the carrying value is at -2%, a 14% improvement during the recent quarter

– KKR Millenium Fund (2002)’s return dropped from +63.3% to +15%; now up +61%

– KKR 2006 is 82% drawn, and a positive 5% return became a negative 27%, and has risen to positive 21%

– Providence’s VI (2006) fund is now 88% drawn, but went from being flat to down 28%; now up 12%

– Terra Firma Capital Partners III (2006) is 73% drawn, and CPPIB’s E215.4 million investment (of a E300 million commitment) is down 59%

– TPG Partners IV (2003)’s return dropped from +80.8% to +18.7%; now +63% with 107% drawn (up 10% during the last quarter)

– TPG Partners V (2006) is drawn at 100% of CPPIB’s US$500 million, and they went from being down 5.6% to down 35%; now down 15%. This fund is the one with the unfortunate investment experience in WaMu bank

– TPG Partners VI (2008) is drawn at 53% of CPPIB’s US$750 million, and the fund is down 1%

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 June 30, 2011, subject to GAAP fair value accounting. The year in the brackets reflects the year that the investment commitment was made by CPPIB. MM equals millions.

Don’t forget that these numbers are not IRR figures, just simple “return on invested capital” calcs. If your ROIC is up, say, 12% after 5 years, times are tough indeed unless your entire vintage year is underwater. Even then, PE managers aren’t supposed to be in the “relative performance” game, as you see with public equities managers.

Apollo Fund V (2002): $150MM, $217.3 (145%), $61.6MM, $451.2MM; +108%

Apollo VI (2005): $400MM, $475.1MM (119%), $457MM, $629.5MM; +32%

Apollo VII (2007): $600MM, $404.6MM (67%), $366.6MM, $548.2MM; +35%

Birch Hill Equity Partners III (2005): $85MM, $87.7MM (103%), 60.4MM, 119.2MM; +36%

Birch Hill Equity Partners IV (2009): $85MM, $4.3MM, $2, $2MM; nmf

Blackstone Capital Partners IV (2002): $185MM, $200.7MM (109%), $161MM, $491.7MM; +145%

Blackstone Capital Partners V (2005): $413.4MM, $390.1MM (94%), $361MM, $413.6MM; +6%

Blackstone Capital Partners VI (2008): $500MM, $0, $-0.5, nmf

Brookfield Special Situation I (2001): $150MM, $189.2MM (126.1%), $26.4MM, $313.7MM; +66%

Brookfield Special Situation II (2006): $300MM, $349.5MM (115%), $203.6MM, $433.9MM; +24%

Carlyle Venture Partners II (2002): $60MM, $64.1MM (107%), $17.8MM, $73.8MM; +15%

CCMP Capital Investors II (2006): $367.7MM, $255.2MM (69%), $317.2MM, $359.4MM; +41%

Clairvest Equity Partners I (2001): $50MM, $46.8MM (93.6%), $14.9MM, $82MM; +75%

Clairvest Equity Partners III (2006): $40MM, $32MM (80%), $28.9MM, $38MM; +19%

First Reserve Fund XI (2006): $300MM, $254MM (85%), $190.4MM, $281.2MM; +11%

First Reserve Fund XII (2008): $500MM, $295.8MM (59%), $268.4MM, $289.5MM; -2%

Goldman Sachs Vintage Fund IV (2006): $200MM, $179.4MM (89.7%), $154.7MM, $220.8MM; +23%

Goldman Sachs Vintage Fund V (2008): $300MM, $157.2MM (52.4%), $171.5MM, $197.9MM; +26%

Heartland Industrial Partners (2001): $150MM, $146.6MM (97.7%), $34.1MM, $66.3MM; -55%

Hellman & Friedman Capital Partners V (2004): $75MM, $67.1MM (89.5%), $60.7MM, $160.8MM; +140%

Hellman & Friedman Capital Partners VI (2006): $400MM, $357.3MM (89%), $351.9MM, $427.7MM; +20%

Hellman & Friedman Capital Partners VII (2009): $600MM, $0MM (0%), $0MM, $0MM; +0%

JP Morgan Partners Global Investors (2001): $175MM, $168.8MM (96.5%), $80.8MM, $262.7MM; +56%

Kensington Co-investment Fund (2002): $40MM, $40.6MM (101.5%), $10.3MM, $58.3MM; +44%

KKR Millenium Fund (2002): $282.5MM, $329.6MM (117%), $270.8MM, $531.1MM; +61%

KKR 2006 (2006): $475MM, $392.6MM (82.7%), $395.6MM, $477MM; +21%

Lightyear Fund II (2006): $100MM, $94MM (94%), $101.5MM, $105.7MM; +12%

MidOcean Partners (2003): $273.1MM, $261.9MM (96%), $21.4MM, $566.3MM; +116%

MidOcean Partners II (2005): $100MM, $73.9MM (74%), $0.1MM, $0.1MM; nmf%

New Mountain Partners III (2007): $200MM, $126.6MM (63.3%), $111.5MM, $128.3MM; +1%

NorthLeaf / CFOF Legacy VC Holdings (2002): $550MM, $259.1MM (47%), $184.5MM, $272.8MM; +5%

NorthLeaf / CFOF Legacy Buyout Holdings (2002): $121MM, $116.7MM (94.2%), $63MM, $136.5MM; +17%

NorthLeaf / CFOF PE Holdings I (2006): $400MM, $278.2MM (50%), $240MM, $283MM; +2%

NorthLeaf / CFOF PE Holdings II (2010): $400MM, $12.5MM (3%), $9MM, $9.8MM; nmf%

Onex Partners (2003): $150MM, $141MM (94%), $115.4MM, $389.4MM; +176%

Onex Partners III (2008): $400MM, $152.1MM (38%), $105.3MM, $140.2MM; -8%

Paul Capital Holdings II (2004): $120MM, $107.6MM (90%), $62.3MM, $241.7MM; +125%

Paul Capital Partners VII (2001): $90MM, $88.3MM (98%), $22.6MM, $141.5MM; +60%

Paul Capital Partners VIII (2004): $100MM, $99.8MM (100%), $58.8MM, $131.7MM; +32%

Paul Capital Partners IX (2007): $100MM, $52.7MM (53%), $45.8MM, $63.5MM; +20%

Paul Capital Top Tier II (2002): $96MM, $86.5MM (90%), $75.3MM, $99.3MM; +15%

Paul Capital Top Tier Investments III (2005): $160MM, $131.2MM (82%), $142.8MM, $163.3MM; +24%

Performance Venture Capital (2005): $185MM, $140.5MM (75.9%), $144.8MM, $168.1MM; +20%

Providence Equity Partners VI (2006): $400MM, $350MM (87.5%), $329.1MM, $392.9MM; +12%

Resolute Fund II (2007): $200MM, $91.4MM (45.7%), $74.2MM, $89.3MM; -2%

Silver Lake Partners II (2004): $100MM, $95.9MM (96%), $68.1MM, $147.1MM; +53%

Silver Lake Partners III (2006): $500MM, $322MM (64.4%), $339MM, $447.7MM; +39%

Sterling Group Partners III (2010): $100MM, $9.1MM (9%), $6.2MM, $6.2MM; nmf%

Terra Firma Capital Partners II (2002): E150MM, E197.8MM (131.9%), E115.5MM, E285.3MM; +44%

Terra Firma Capital Partners III (2006): E300MM, E217.6MM (72.5%), E83.4MM, E89.7MM; -59%

Thomas H. Lee Parallel Fund VI (2006): $250MM, $173.2MM (69%), $188.8MM, $209.7MM; +21%

Thomas Weisel Partners GGP II (2003): $50MM, $46MM (92%), $30.2MM, $54.3MM; +18%

TPG Partners IV (2003): $100MM, $108.2MM (108%), $88.6MM, $178MM; +65%

TPG Partners V (2006): $500MM, $499.2MM (100%), $293.4MM, $422.1MM; -15%

TPG VI (2008): $750MM, $400.1MM (53%), $330.1MM, $397.6MM; -1%

Welsh, Carson, Anderson & Stowe X (2005): $200MM, $192MM (96%), $183MM, $213.6MM; +11%

Welsh, Carson, Anderson & Stowe XI (2008): $300MM, $112.5MM (37.5%), $117.1MM, $117.1MM; +4%

Wellington Financial Fund III (2006): $150MM, $82MM (55%), $82.8MM, $105.3MM; +29%

Transparency alert: In the case of our Fund III, our capital recirculates (unlike most funds out there), which is why we are able to do more than $240 million of deals without ever drawing all of our fund capital. Between our Capital Call line and undrawn loan commitments as of that quarter end, our Fund III had $114 million committed as of June 30th, or 76% of our entire capital base.

Of the CPPIB’s 135 disclosed external manager funds, 49 funds had a TVPI (Total Value to Paid-in-Capital) of 130% or higher, including the reported value of their current portfolio (Wellington’s Fund III was at 129% TVPI). And of those 49 funds at 130% TVPI or higher, only 12 funds are of a “2006 or later” vintage. The rest of the Top 49 TVPIs are 2000-2005 vintage, which was the beginning of what Henry Kravis called to “Golden Era” of Private Equity.

Don’t forget that CPPIB publishes returns in the home currency of the fund in question, and not in the equivalent C$; as such, we really have no idea if we are making money or not on any particular fund itself.

Of the CPPIB’s entire C$29.5B external PE portfolio, it is unfortunate that only 29% of its commitments are actually from pre-2006. The rest, C$20.8 billion worth, are all commitments to funds that were organized in 2006 and later. Which, given the weighting, will likely have a strong bearing on the ultimate return profile of the entire PE program. And that’s before Canadian taxpayers have been whacked by the negative currency moves of the past few years (see prior post “CPPIB’s $29 billion PE program largest naked currency bet in Canadian history” Mar 31-11).

MRM