Ontario Teachers keen for more Asia co-investment

Teachers' Private Capital (TPC), the Canadian pension system's PE and direct investment arm, has so far deployed C$1.5 billion ($1.45 billion) through Asian GPs while a further C$1 billion has been committed and is available to be drawn down, said Jane Rowe, senior vice president at OTPP.

On a global basis, TPC has deployed C$12 billion, split equally between fund and direct investments. This includes commitments to GPs that invest in Asia out of global funds.

The TPC portfolio includes two GPs likely to announce final closes on their funds in coming weeks: MBK Partners, which will reach the hard cap of $2.6 billion on its third pan-regional vehicle, according to market sources; and Kedaara Capital - a first-time fund and one of only two new commitments TPC made globally last year - which is set to raise at least $500 million for India investments.

TPC has also backed funds operated by China-focused FountainVest Partners, Japan's Unison Capital, and pan-regional players PAG and Unitas Capital, as well as China VC specialist GSR Ventures.

TPC's capacity for co-investment in Asia is likely to increase now that OTPP has a presence in the region, with its Hong Kong office opening this week. Rowe hopes there will be at least eight investment staff in place within 6-9 months.

The PE and direct unit's most recent co-investment in the region was alongside MBK Partners in South Korea. Other private activity has been driven by the infrastructure and public equities units.

In the past 12 months, OTPP has partnered with infrastructure specialist Hastings Fund Management to buy a 50-year lease on Sydney Desalination Plant for A$2.3 billion, while a 9.9% stake in South Korea's Kyobo Life Insurance was acquired for $398 million and Chinese online retailer 360Buy - now known as JD.com - received about $300 million.

The JD.com deal is an example of near-public "relationship investing," whereby the public equities unit leverages ties with local entrepreneurs and gets involved in a company when it is fairly close to going public. The unit also participates in traditional asset management-style investing.

OTPP's total assets stood at C$129.5 billion at the end of 2012, up from C$117.1 billion the previous year, with a 13% return for the 12-month period. Investment earnings were C$14.7 billion compared to C$11.7 billion in 2011. The fund's total value has nearly doubled since 2002.

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• Topics
• LPs
• Investments
• North America
• OTPP
• LPs
• Co-investment
• Direct investment