The CPP Investment Board’s global credit investment program, CPPIB Credit Investments Inc., is investing $50 million in a capital markets platform, and plans to invest up to $2 billion in companies sourced through the platform.
CPPIB Credit said Thursday that it has joined Stone Point Capital and KKR & Co. LP as a joint venture partner and investor in MerchCap Solutions LLC (MCS), a company that provides capital markets services to sponsor-backed and corporate mid-market companies, and principal investments to support its client needs. Stone Point and KKR had already committed $300 million of capital to MCS, now CPPIB Credit will contribute an additional $50 million of equity to MCS to support its business. Mark Jenkins, head of private debt for CPPIB, will join the company’s board. The day-to-day origination, execution and underwriting activities of MCS will continue to be carried out by KKR employees.
Additionally, CPPIB has allocated up to $2 billion of capital for direct investment in middle market debt transactions and other non-traditional corporate lending opportunities arranged for clients of MCS.
“This investment is an excellent opportunity to expand CPPIB’s private debt portfolio into the middle market, an attractive and underserved market segment,” said Jenkins. “We also believe there are additional underserved areas that we can target by combining our focus with MCS’s structuring and distribution expertise. This platform is well suited to our comparative advantages and internal underwriting capabilities, and we have initially earmarked up to $2 billion of additional capital for direct investments in mid-market companies through MCS.”