Canada's top pension fund slows direct tech deals, shifts focus after uneven returns and market shifts
A wave of high-growth tech bets is giving way to a new era of caution at Canada’s largest pension fund, as the Canada Pension Plan Investment Board (CPPIB) overhauls its private equity strategy after a stretch of uneven returns.
Bloomberg reports that CPPIB’s growth equity group, which previously surged ahead with deals in artificial intelligence and fintech, has sharply slowed its direct investment pace since a burst of activity in 2021 and 2022.
The group now holds stakes in about 30 companies, but has shifted some assets into a different portfolio and is increasingly turning to third-party managers for new investment ideas.
Recent activity has been selective: CPPIB invested US$75m in OpenAI and joined Wealthsimple Financial Corp.’s latest equity round, but has made only a handful of other direct growth equity investments since early 2024.
The fund’s San Francisco office will close by year-end, with new growth equity head Max Miller relocating to Toronto.
Miller, who took the reins in June as the team’s third leader since 2023, reports to head of funds Afsaneh Lebel.
Lisa Conway, recently of Ontario Municipal Employees Retirement System, has also joined the group, which includes three other managing directors.
Returns in the growth equity portfolio have been mixed. Some holdings have soared—Databricks Inc. recently raised funds at a US$100bn valuation, and KoBold Metals Co., backed by Jeff Bezos and Bill Gates, is advancing mineral exploration.
According to Bloomberg, CPPIB also saw strong exits with Klarna Group Plc and Netskope Inc. going public.
However, other investments have stumbled:
-
Sana Biotechnology Inc. shares have dropped over 80 percent since its 2021 IPO.
-
Plaid Inc. raised money this year at less than half its 2021 value.
-
Canadian chip startup Untether AI began winding down in June; its team moved to Advanced Micro Devices Inc.
-
CPPIB no longer holds an investment in Untether AI.
The portfolio also includes N26, Germany’s largest digital-only bank, which recently saw a leadership shakeup after regulatory scrutiny.
The shift in strategy follows a correction in technology and growth companies as the post-pandemic market adjusted and interest rates rose.
“The current fiscal year will represent one of our biggest years ever for direct investing in growth equity companies,” said Michel Leduc, head of public affairs and communications.
Leduc emphasized that the private equity department’s partnership model and “appetite” for direct investment remain unchanged.
Three years ago, CPPIB designated its growth equity group as a distinct entity within private equity.
At the time, then-global head of private equity Suyi Kim said her team had “all the elements required to build a formal growth equity practice that was truly one of a kind, on a global scale.”
About half of CPPIB’s growth equity direct holdings were made between 2020 and 2022, during a period of ultra-low interest rates and soaring tech valuations.
As capital costs rose, sector valuations came under pressure.
Private equity’s share of CPPIB’s total net assets under management has shifted: 25 percent in 2021, 25 percent in 2022, 26 percent in 2023, 25 percent in 2024, and 21 percent in 2025.
A few months ago, the growth equity portfolio included around 40 companies, but the fund has since exited some investments and moved others to Integrated Strategies Group, an entity created in 2023 to manage holdings that no longer fit within traditional investment departments.
This group sits within the office of the chief investment officer.
