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IPE special report May 2018

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CPPIB acquires GE private placement arm in $12bn deal

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The Canada Pension Plan Investment Board (CPPIB) has agreed to purchase the private lending business of General Electric Capital for $12bn (€10.6bn).

Chicago-based Antares Capital, a private placement business, will now be wholly owned by the CAD265bn (€191bn) CPPIB and will continue its focus on lending to US middle-market companies, having provided more than $120bn of finance since 2010.

GE has been selling down many of its investment businesses and portfolios to avoid being classed as a financial institution of significance by US authorities, thus being required to hold capital reserves.

Under the new ownership, Antares will continue to operate as a standalone business, retaining the brand, leadership and investment team.

However, the acquisition by CPPIB will expand and complement its existing private lending portfolios, in addition to giving it access the US middle market.

Antares will see inflows into its portfolios from CPPIB, which said it would invest follow-on capital immediately, allowing the firm to “grow and prosper” for decades.

President and chief executive at CPPIB, Mark Wiseman, said its strategy to find scale through platforms in asset classes was behind the purchase.

“We are advancing the prudent diversification of our investment portfolio, strengthening the fund even further,” he added.

Mark Jenkins, global head of private placements at CPPIB, said the fund had been studying the US middle-market lending sector for some time, and that the purchase of Antares now allowed it enter the market.

“With this single transaction, we immediately acquire turn-key scale and a long-term partnership with the best, most experienced management team in the market,” he said.

“This business is extremely complementary to our existing business.”

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