The Canada Pension Plan Investment Board (CPPIB) has announced the completion of a secondary transaction to acquire a portfolio of primarily food assets from the HM Capital Sector Performance Fund and related co-investors for US$468 million.
The CPPIB will also commit US$138 million in a newly formed private equity fund, Kainos Capital Partners. The food and consumer products team of HM Capital—a Dallas-based private equity firm that is winding down—will manage both the assets that the CPPIB has acquired as well as the Kainos Capital fund with a focus on investments in the food sector.
According to a story in the Wall Street Journal, the food businesses the CPPIB is purchasing from HM Capital include Advanced H20, National Selection Foods (doing business as Earthbound Farms) and Milk Specialties Global.
“We are excited to complete another significant and innovative transaction in the secondary private equity market,” said André Bourbonnais, senior vice-president, private investments, with the CPPIB. “This was a unique opportunity for us to partner with one of the most successful food investment franchises and purchase a portfolio of well-managed quality food companies, each with market-leading positions. We look forward to partnering with Kainos Capital in creating value over the long term for these assets and the new Kainos fund.”
Bourbonnais said the CPPIB has invested more than $5 billion in the secondary private equity market over the past five years and expects to make “significant” further investments in this market over the next five years.