Behind the Co-Investing Curtain, Part II CPPIB QIC Memorial - - PowerPoint PPT Presentation

Behind the Co-Investing Curtain, Part II

CPPIB QIC Memorial Hermann Health System

Total AUM ($ USD B) $240 (C$317) $60 $3.0 Total PE AUM ($ USD M) $43,800 (C$57,800) $3,900 $0.3 Type of Plan Public Pension Superannuation Endowment Maturity of Co-Investment program 12 yrs. (since ~2005) 12 yrs. (since 2005) ~1 yr. Size of Co-Investment Team Passive Minorities: ~20 Direct/Co-Sponsor: ~55 14 1 (also responsible for funds) Total Private Equity Investment Staff ~105 14 1 (also responsible for co-invest) Co-Investment Opportunities Mix of syndicated, co- underwritten and co- sponsored Mix of syndicated, co- underwritten and co- sponsored Syndicated

16 9 2 16

Considering, but no program is currently underway Passive, our co-inv. exposure is almost exclusively through commingled funds Advisor, a dedicated advisor manages the majority of our co-inv. Program In-House (Opportunistic), our team is always looking for great investments, but we don’t have a specific mandate to co- invest

How would you describe your organization’s co-investment program?

17 10 10 14 15 0% - We never exclusively-rely

• n GP memos

1-25% - We sometimes exclusively-rely on GP memos 26-50% - We often exclusively- rely on GP memos 51+% - We exclusively-rely on GP memos for most of our diligence projects N/A – We don’t have a co- investment program / unsure

Approximately what percent of diligence projects does your organization rely solely

• n GP-provided diligence memos (i.e., no independent due diligence)?

13 25 1 25 Detailed Review of the add-on before committing the additional capital Moderate Review of the add-on, focused on high-level red flags, before committing the additional capital No Review, we do not typically underwrite the add-on acquisition N/A, we don’t have a co-investment program / unsure

How does your organization typically approach underwriting a co-investment when it requests voluntary follow-on capital for an add-on acquisitions? (i.e., how do you evaluate the add-on target?)

12 24 16 6 It’s never appropriate to bear any broken deal fees Is appropriate only when the co-investor is also eligible to share in transaction fees (incl. monitoring fees and broken deal awards) Is appropriate only when the co-investor is co-underwriting the deal (regardless of whether they share in transaction fees) Is appropriate in most circumstances, but best-efforts should still be made to avoid paying them

Which of the following best describes your personal viewpoint on LPs bearing broken deal fees on co-investments?

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