Canada Pension Plan Investment Board won the bidding for General Electric Co.’s private-equity lending business. The pension board agreed to pay $12 billion for the transaction. It has managed to lead its way towards the acquisition and has overtaken private-equity firms such as Apollo Global Management LLC and KKR & Co. Experts believe that this is one of the most aggressive bids compared to other competitors’ offers.
Chief Executive Mark Wiseman, leader of the fund, has more than 260 billion Canadian dollars (US$211 billion) under management, up from C$219.1 billion a year ago. Canada’s chief actuary estimates that these will reach C$300 billion by 2020.
The Canadian funds are “no longer content just being passive investors in private-equity funds,” said Jonathan Melmed, head of the Canada practice and co-chair of the global private-equity and buyout practice at law firm Morrison & Foerster LLP. The fund’s aggressive approach in acquiring GE Capital’s private-equity lending unit. The business lends money to private-equity firms for the acquisition and operation of middle-sized companies and is responsible for 400 loans. The company employs about 300 people who manage new loans and transactions for customers.
About the Canada Pension Plan Investment Board
The Canada Pension Plan Investment Board operates a debt business, which was established in 2009 to take advantage as banks backed out during the credit crunch. The midsize-lending market, where the GE business is considered a leader, appealed to the Canadian fund due to a much higher recurring returns it offered, said Mark Jenkins, head of the fund’s private investments.
Under the direction of the then Canadian Finance Minister Paul Martin, the CPP Investment Board was created in 1997 as a group that was independent of the government to monitor and invest the funds held by the Canada Pension Plan (CPP). The CPP Investment Board is a crown corporation created by an Act of Parliament. It oversees the operation of various aspects of the CPP reserve fund. It also plans changes in the direction and the board of directors that is accountable to but independent from the federal government. The CPP Investment Board’s mandate is in its founding legislation, the Canada Pension Plan Investment Board Act. Its investing mandate is to achieve a “maximum rate of return, without undue risk of loss.”
About Mark Wiseman
Mark Wiseman is the President and Chief Executive Officer of CCP. Mark assumed the role of President and CEO in July 2012. He is responsible for leading the CPP Investment Board and its investment activities. Mark Wiseman joined the CPP Investment Board in June 2005 as the organization’s Senior Vice-President, Private Investments. He was later named Executive Vice-President, Investments, responsible for managing all of the investment activities of the CPP Investment Board – Public Market Investments, Private Investments and Real Estate Investments. Born in Niagara Falls, Ontario, Mark holds a BA from Queen’s University and a law degree and MBA from the University of Toronto. In 2006, Mark was named to Canada’s Top 40 Under 40.
Jonathan M.A. Melmed
Jonathan M.A. Melmed, Age 35, New York Office, Corporate. Mr. Melmed’s practice focuses on international corporate mergers and acquisitions private equity and venture capital. He is a member of Chadbourne’s Canada practice and private equity group. Mr. Melmed represents corporations as well as private equity, venture capital and hedge funds in domestic and cross-border M&A, private equity and venture capital transactions, including U.S.-Canada and U.S.-Israel. He has also represented numerous companies and investment banks in U.S. securities transactions, including initial public offerings, as well as both public and private debt and equity offerings. While Mr. Melmed has broad sector experience, including in the media and life sciences sectors, his recent practice has focused heavily on renewable energy. Mr. Melmed received a B.A., with Great Distinction and Dean’s Honour List, from McGill University in 1994 and an LL.B. and a B.C.L., with Distinction, from McGill University, Faculty of Law, in 1998. He is a member of the New York and Quebec, Canada bars.
About General Electric
General Electric (GE) is an American multinational conglomerate corporation incorporated in New York. General Electric has headquarters in Fairfield, Connecticut. As of 2015, the company operates through the following segments: Power and Water. Oil and Gas, Energy Management, Aviation, Healthcare, Transportation, and Capital. In 2011, General Electric has ranked among the Fortune 500 companies as the 26th-largest firm in the U.S. by gross revenue. As of 2012 the company was listed the fourth-largest in the world among the Forbes Global 2000, further metrics being taken into account. General Electric stock market evolution http://www.marketwatch.com/investing/stock/ge