The Caisse de dépôt et placement du Québec is teaming up with Generation Investment Management to acquire General Atlantic’s and H.I.G. Capital’s investment in FNZ, a global fintech firm.
With the investment, the firm is valued at approximately £1.65 billion. The firm itself holds £330 billion in assets under administration, servicing the needs of its partners, such as asset managers, banks and insurers.
“We have researched the best global financial services technology businesses with a focus on companies that have long-term, truly global-scale potential,” said Stephane Etroy, executive vice-president and head of private equity at the Caisse, in a press release. “We are extremely excited to partner with [the] FNZ management team to build a business over a time period which is not typical for either private equity or public equity businesses.
Read: Caisse invests in travel app, PSP in British ports group
“Through our newly announced partnership with Generation, we are creating a new model of sustainable equity investing which reflects the ethos of both companies, and is ideally suited to the objectives of long-term sustainable value creation.”
FNZ was founded in New Zealand in 2003. In 2009, its management partnered in a buy-out with H.I.G. Capital, receiving an additional investment from General Atlantic in 2012.
“We see a unique opportunity to create a global-scale platform for wealth management,” said Adrian Durham, chief executive officer and founder of FNZ, in the release. “This requires a willingness to invest for the long term. The firm’s 400 employee shareholders are firmly committed to this outcome and CDPQ-Generation is the perfect partner, given its unique eight- to 15-year time horizon and focus on sustainable investments.”
The investment kicks off a new partnership between the Caisse and Generation to invest US$3 billion in long-term, sustainable equity investments with time horizons between eight and 15 years.
Read: OMERS acquires U.S. medical manager, Caisse takes on office venture
“For nearly 15 years, Generation has worked to prove the business case for long-term sustainable investing across both listed and private equity markets,” said David Blood, senior partner at Generation, in the release. “This partnership affords us the opportunity to deploy longer-term capital, which truly embodies the concept of sustainable investing. This is not only an important stride in fulfilling our own mission at Generation, but one that we hope will catalyze a more sustainable form of investing in the capital markets.”
The parameters of the partnership include targeting businesses with outstanding management teams and excellent long-term growth potential. The investments must also be a net positive for the environment and benefit society. As well, the partnership will specifically watch for opportunities where technology can be a driver of change.
“This partnership is a natural match between two like-minded organizations,” said Michael Sabia, chief executive of the Caisse, in the release. “Sustainability begins with long-term involvement, which is why we made long-term investment the cornerstone of CDPQ-Generation. We both integrate [environmental, social and governance] principles at the core of our investment strategies and believe they go hand-in-hand with attractive returns.”
Read: Caisse ups stake in European multi-technical service provider