Canada Pension Plan’s Big Deal

CPPIB to buy GE unit for $12 billion

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616726_handshakeCanada Pension Plan Investment Board (CPPIB) says it has a $12-billion deal to acquire the Antares Capital lending operation from the financial arm of General Electric.

CPPIB CEO Mark Wiseman says the acquisition of Chicago-based Antares Capital will give the Canadian retirement fund manager a significant presence in part of the U.S. lending sector that has potential for long-term growth.

Antares Capital’s management and about 300 employees will operate the business as a stand-alone, independent lender to private-equity sponsors, subject to regulatory approval.

Over the past five years, Antares has provided more than US$120 billion in financing to private equity sponsors and the market is worth an estimated US$96 billion a year.

“This acquisition exemplifies our strategy to achieve scale in key sectors through platform investments,” Wiseman said in a statement.

“It secures a market-leading business that is exceptionally well positioned to deliver value-building investment flows.”

The CPPIB oversees about $264.6 billion of assets on behalf of the CPP. It expects the Antares deal to close in the third quarter.

General Electric said earlier this year it plans sell most of the assets of its GE Capital financial arm over the next 18 months, but plans to keep the components that relate to its industrial businesses.

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