Is CPP Investments’ Private Equity Team Losing the War For Talent
Fengate Asset Management has bolstered its private equity team with the addition of Jennifer Pereira as managing director.
She joins the firm from CPP Investments where she has spent almost 12 years in roles including, most recently, leading the consumer sector as private equity managing director for the pension plan investment operation.
After graduating University of Toronto with a B.Sc. in Engineering and Wharton School of Business with an MBA, Pereira’s years of financial services industry experience extends to consulting having been with Boston Consulting Group advising a broad range of clients with a focus on financial institutions and consumer companies.
On joining the alternative investment manager, she says: “I look forward to working alongside colleagues to deliver on growth equity investments for our clients and portfolio companies and build on the firm’s successful track record.”
Her new role includes investment decision-making, management of Fengate’s private equity funds, strategy, operations, and investor relations.
Valuable addition
Fengate has offices in Ontario and Texas and has over $7 billion of capital commitments under management, focused on infrastructure, private equity, and real estate strategies.
Justin Catalano, group head and managing director of Fengate Private Equity, says Pereira is a valuable addition to the team.
“Her extensive experience and strategic vision, and strong track record in managing complex transactions and leading successful teams make her an excellent fit. Jennifer’s dedication to excellence aligns perfectly with our commitment to delivering exceptional value to our partners and investors.”
No, it's not a slow news day at Pension Pulse so bear with me, I will get to the point.
First, I have never met or talked with Jennifer Pereira, and I wish her well in her new role at Fengate.
But this article caught my attention because Ms. Pereira is highly qualified and has extensive experience in private equity.
She sat on Petco Health and Wellness Company's board of directors along with other senior executives from CPP Investments, and she does have extensive experience:
Jennifer Pereira has been a member of Petco’s board of directors since 2016. Ms. Pereira is a Senior Principal at CPP Investments, which she joined in 2011 and where she currently leads consumer and retail private equity efforts in North America. Prior to joining CPP, Ms. Pereira worked at the Boston Consulting Group from 2006 to 2009. Ms. Pereira also serves on the board of directors of Ultimate Kronos Group and as a board observer of Merlin Entertainments Ltd. She holds a bachelor’s degree in engineering from the University of Toronto and a master’s degree in business administration from the Wharton School at the University of Pennsylvania.
[Note: CVC/ CPP Investments acquired Petco in 2016 for US $4.6 billion. See details here.]
So what if she is highly qualified and has extensive experience in private equity?
Well, the point I'm making is people like her aren't a dime a dozen, even at organizations like CPP Investments and if she left after 12 years at the Private Equity group, it's not that easy to replace her.
That is 12 years of experience and she could have stayed on at CPP Investments to take on a more senior role but instead opted to leave.
It's a free world and unless she invested directly with Fengate (no evidence she did), I don't see the problem with taking on a new challenge.
However, for an organization like CPP Investments which has an extensive private equity portfolio -- one of the largest or the largest in the world among institutional investors -- they need to attract and retain talent.
That means not only does compensation have to be attractive but there also needs to be succession planning and they need to make sure that people like Jennifer Pereira stay put and see opportunities ahead.
Now, it's not the end of the world, CPP Investments has huge bench strength that most other large Canadian pension funds can only dream of (the others typically poach the talent away from CPP Investments as PSP did when it hired Deb Orida to be their CEO).
Ms. Pereira will be replaced with someone who is highly qualified, I have no doubt about that, but the article speaks to the truth that there is a war on talent and CPP Investments and all of Canada's large investment managers are competing for this talent.
However, I do want to temper this "war for talent" by stating I'm not at all comfortable paying senior executives at Canada's large pension funds the same way Goldman, TPG, Blackstone, KKR and other elite private equity funds pay their people.
Why? Well for one, they manage billions from captive clients and second of all if senior execs want to make multi millions every year like a star trader at Citadel or a big PE executive at TPG or other elite PE firms, then they should go work there and deal with the constant pressure of producing results.
A lot of people think they are worth a lot more than they can actually get if they had the pressure of originating and delivering value on deals.
It's one thing being a co-investor along with a big PE firm, another doing it all by yourself when the buck stops with you.
That goes for me too. I need to produce returns because I sure as hell ain't making friends and a living writing this pension blog (some people are nice, others have egos the size of Manhattan!).
Alright, let me wrap it up there and if you have any thoughts, feel free to email me at LKolivakis@gmail.com.
And if you really want to support my blog, enough with the kind words, they don't pay my bills. Put your money where your mouth is and donate via PayPal at the top left-hand side under my ugly mug.
Below, established in 2016, Fengate Private Equity is a Toronto-based investment platform focused on partnering with growth-oriented businesses in the business services, healthcare and information, communications and technology (ICT) sectors. With more than $700M in assets under management, their mission is to partner with entrepreneurs to help them realize their growth ambitions and drive lasting positive change in their businesses – an approach they describe as providing Transformative Capital.
I wish Jennifer Pereira lots of success in her new role at Fengate and who knows, I wouldn't be surprised to see her back at a Maple Eight in the future in another senior role.
Update: Joe Nunes of Actuarial Solutions posted this on LinkedIn after reading this comment:
Hard to have it both ways - you don't want the CPPIB paying super high salaries and bonuses but then lament when someone leaves for a firm that can afford to do so.
I am more cynical than most around the money game, firms with lots of assets at stake can pay leading partners extremely well to help hang onto existing AUM and especially if they can help grow the asset base.
What is missing in the investment industry is a way to divide performance between random outcomes and skill by individual. Firms fail and the talent moves around but no one tracks and correlates individual winners and losers.
My suspicion is that Ms. Pereira is a winner - but I also think being part of CPPIB has helped her become a winner by exposing her to opportunities and decisions that have furthered her understanding of markets.
I replied:
You raise good points. First, I do want CPP Investments and others to pay competitive compensation but they obviously can’t compete with elite private equity funds or hedge funds.Have a nice weekend!
Second, by virtue of working in a senior role with PE team at CPP Investments, Jennifer Pereira co-invested along with top PE funds and gained a lot of great experience. But she also had qualifications to analyze co-investment opportunities quickly and deliver on them on a timely basis.
Some industry experts have told me that while competitive compensation is required, there is a lot of “dead weight” at these large Canadian pension funds and not everyone is pulling their weight. These funds need to make sure they pay for performance and also take into consideration other important attributes like leadership skills and mentoring younger workers.
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