OTPP invests in data centre company, financial advisory firm, Caisse encourages diversity with new fund

The Ontario Teachers’ Pension Plan is leading a new US$360 million equity investment in a Singapore-based data centre developer, operator and investor.

Founded in 2017, Princeton Digital Group has a current portfolio of 18 centres across China, India, Indonesia and Singapore. Global private equity firm Warburg Pincus LLC is also participating in the investment.

“We’re excited to invest in PDG alongside Warburg Pincus,” said Ben Chan, regional managing director for Asia-Pacific at the Ontario Teachers’, in a press release. “We see data centres as a compelling investment opportunity given their essential role in the rapid digitalization and growth of data occurring in Asia and around the world. We’ve been impressed by PDG’s high-quality management team, unique strategy and track record of success, and look forward to leveraging our experience to help the company continue to scale across Asia.”

The investment takes place a month after the pension plan announced the opening of its Singapore-based Asia-Pacific office.

The Ontario Teachers’ is also acquiring independent investment and financial advisory firm Allworth Financial in a joint investment with Lightyear Capital.

The transaction, expected to close in the fourth quarter of 2020, will see the senior management team of Allworth remain as significant shareholders. The financial terms of the transaction weren’t disclosed.

“As fiduciaries to over 300,000 active and retired teachers in Ontario, we understand the critical role that Allworth and its advisors play in providing quality financial planning solutions to its clients,” said Karen Frank, senior managing director, equities at the Ontario Teachers’. “We believe the company is an attractive investment given its differentiated and retirement-centric business model as well as industry tailwinds including an ageing population and increased demand for professional and holistic wealth planning services. We look forward to supporting management’s long-term value creation and growth aspirations for Allworth.”

In other investment news, the Caisse de dépôt et placement du Québec is launching Equity 25³, an investment fund aimed at increasing diversity and inclusion at growing small and medium-sized enterprises.

The $250 million investment fund is the largest of its kind in Canada and will provide investments of between $5 million and $30 million to businesses, according to a press release. Successful applicants are then required to ensure that at least 25 per cent of their boards of directors, management teams and shareholders is comprised of people of diverse backgrounds within five years of funding confirmation.

“It has been clearly established that greater corporate diversity positively impacts innovation, risk management, productivity and financial performance,” said Kim Thomassin, executive vice-president and head of investments in Quebec and stewardship investing at the Caisse, in the release. “Through this dedicated fund, we want to encourage SMEs to increase diversity in their organizations using a measurable objective so they can benefit from this additional performance lever.”