Canada Pension Plan Investment Board (CPPIB) has completed its $12 billion acquisition of Antares Capital from GE Capital. Antares management has also taken a stake in the buy-out.
CPPIB will control Antares Holdings, which in turn will oversee Antares Capital, as a subsidiary of its credit unit, CPPIB Credit Investments. Antares will operate as a standalone business, the Canadian pension fund said on Friday.
CPPIB has poured $3.9 billion of equity into the purchase. The deal is also backed by $13.9 billion of senior secured loans, including a $10.7 billion asset-backed facility secured against loans originated by Antares and included in the sale.
Antares will continue to be run by managing partners David Brackett (pictured) and John Martin, who established Antares Capital in 25 years ago, remaining at the head of the business through its buyout and subsequent sale by GE Capital.
“Our new relationship with CPPIB Credit Investments will allow us to continue offering clients the same level of consistency, predictability and reliability that they have come to expect from us,” said Brackett. “The Antares brand will return to a more independent operating structure that is backed by nearly $4 billion in initial equity and access to follow-on capital at scale from CPPIB Credit Investments.”
The sale does not change Antares’ focus. The firm will continue to make sponsor-backed leveraged loans in the mid-market arena via its unitranche product, but CPPIB has indicated that the unit will grow.
“We look forward to building a long-term partnership with the entire Antares team who have invested alongside us to further grow Antares’ business and broaden its product offerings,” said Mark Jenkins, senior managing director and global head of private investments at CPPIB. “This investment exemplifies our strategy to achieve scale in key sectors through platforms. The Antares business is also highly complementary to our existing Principal Credit Investments (PCI) portfolio.”
Antares Capital has offices in Atlanta, Chicago, Los Angeles, New York, Norwalk (Connecticut), San Francisco and Toronto. The lender has provided more than $120 billion in financing over the past five years.
CPPIB Credit Investment is comprised of CPPIB’s PCI and Private Real Estate Debt groups. With investments and 36 professionals in the Americas, Europe and Asia, CPPIB’s PCI group lends globally and across the capital structure. It makes direct primary and secondary investments in a variety of instruments including leveraged loans, high-yield bonds, mezzanine and intellectual property, typically targeting loans larger than the mid-market, writing cheques of up to $1 billion.
CPPIB invests excess funds for the Canada Pension Plan. It invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, New York City and São Paulo, CPPIB is independently managed. As of 30 June 2015 the CPP Fund totalled C$268.6 billion ($204 billion; €176 billion).
CPPIB announced in June that it would be buying the Antares unit, the lending arm of GE Capital that works exclusively on sponsor-backed mid-market transactions, for $12 billion. General Electric said in April that it would selling off most of its lending business.