British Columbia Investment Management Corp. is mulling the sale of $2 billion in private equity assets in the secondary market to raise capital for other investments, according to people familiar with the matter.
(Bloomberg) — British Columbia Investment Management Corp. is mulling the sale of $2 billion in private equity assets in the secondary market to raise capital for other investments, according to people familiar with the matter.Â
The pension fund is close to finalizing the sale of some of its Europe-focused investments and is in the middle of negotiations to reduce some of its US positions, one of the people said, who asked not to be identified due to the confidentiality of the matter.
The primary goal is to rebalance BCI’s portfolio and free up cash from investments through funds to take advantage of potential direct co-investment opportunities, this person said.Â
A spokesperson for the Victoria, British Columbia-based fund declined to comment.
Some institutional investors hit their allocation limits to private equity after last year’s rise in interest rates caused a swift correction in bonds and stocks. That forces them to weigh disposing of some private equity holdings to create room for new ones. Public pensions saw their share of those secondary-market trades increase 9 percentage points globally — or nearly $2 billion — compared with 2021, as they adjust their portfolios, according to Campbell Lutyens & Co.Â
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BCI, which invests the retirement savings of British Columbia’s public sector workers, returned 3.5% for the year ended March 31, compared to a 0.3% increase generated by its own internal benchmark, the fund said in the statement Tuesday. Net assets advanced to C$215 billion ($163.4 billion).
Private equity, infrastructure and renewable resources were large contributors to the gains, BCI said in the statement. The pension fund held C$28.3 billion in private equity assets, up 4.7% from the prior fiscal year.
The fund exited some of its key assets in private equity and took advantage of strong valuations, selling about C$5 billion during the last fiscal year, Ramy Rayes, executive vice-president of investment strategy and risk, said in an interview.
The Canada Pension Plan Investment Board is also weighing the sale of $3 billion of private assets in the secondary market, Bloomberg reported earlier this month. Caisse de Depot et Placement du Quebec, the country’s second-biggest pension manager, sold $2 billion of private investments on the secondary market in 2022 and is open to another transaction of a similar size this year, one person said.
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