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Canada Pension Joins KKR to Invest $2 Billion in Credit

Canada Pension Plan Investment Board, the country’s biggest public pension manager, joined a venture formed by KKR & Co. (KKR) and Stone Point Capital LLC to manage and underwrite debt and equity deals.

CPPIB Credit Investments Inc., a unit of the Toronto-based pension manager, will add $50 million to the $300 million committed by New York-based KKR and Stone Point last year to support the venture, called MerchCap Solutions LLC, the companies said today in a statement. CPPIB said it plans to invest as much as $2 billion in middle-market debt deals.

“This investment is an excellent opportunity to expand CPPIB’s Private Debt portfolio into the middle market, an attractive and underserved market segment,” Mark Jenkins, CPPIB’s head of private debt, said in the statement.

KKR and Greenwich, Connecticut-based Stone Point committed $150 million each to back the venture, continuing a strategy of diversification away from leveraged buyouts. KKR in 2006 hired Citigroup Inc. (C)’s Craig Farr to create an underwriting business for the firm’s own holdings. Farr extended those services to non-KKR companies as Wall Street banks wrestled with heightened regulations in the wake of the 2008 global financial crisis.

To contact the reporter on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net

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