The Canada Pension Plan Investment Board is launching a growth equity team.
The team, which will be led by Leon Pedersen as managing director and head of growth equity, will rely on some elements of the CPPIB’s traditional approach to private equity investing. This includes its focus on building direct relationships with promising companies before they need growth capital.
While the CPPIB’s venture capital investment strategy focuses on investing modest amounts in promising startups and its private equity buy-out strategy usually involves securing majority stakes in companies with a four- to six-year horizon, its growth equity team will chart an intermediate course, according to a press release, which noted it will focus on securing minority stakes in businesses poised for transformational growth and providing the funding and support required to realize this growth potential.
In the release, Pedersen said the team’s strategy will be to emphasize its ability to provide a stable source of long-term capital to generate significant risk-adjusted returns on behalf of plan contributors and beneficiaries.
“We are playing the long game. Our reputation as [a] high-quality investor and as [a] stable source of patient, long-term capital is an important one that helps us support our mission, which is maximizing returns without undue risk of loss for the more than 21 million contributors and beneficiaries of the Canada Pension Plan.”