Frank Su, the head of private equity for Asia at CPP Investments, has officially left the organization as of October 31. His departure marks a significant change in leadership for the Canadian pension giant, which manages a substantial portfolio in private equity across the Asia-Pacific region.
Key Takeaways
Frank Su has left CPP Investments after nearly a decade with the firm.
His exit follows a series of layoffs within the Asia business unit.
CPP Investments is experiencing a decline in its Asia private equity portfolio.
Background on Frank Su
Frank Su joined CPP Investments in 2014, bringing with him extensive experience from Bain Capital, where he served as a principal for six years. At CPP Investments, he held multiple roles, including chairperson of the Asia private equity committee and a member of the global leadership team. His leadership was pivotal in managing the institution's investments in the Asia-Pacific region.
Impact of Su's Departure
Su's exit comes at a time when CPP Investments is reassessing its strategy in Asia. The institution has seen a decline in its private equity allocation to the region, which accounted for only 14% of its private equity portfolio as of March 31, down from 17% the previous year. This shift reflects broader challenges in the Asian market, particularly in China, where investments have underperformed due to economic headwinds.
CPP Investments' Current Position
As of now, CPP Investments manages approximately C$646.8 billion ($464.4 billion) in assets, with 31% allocated to private equity. The institution is recognized as the world’s second-largest private equity allocator. However, its Asia investments across all asset classes returned a mere 0.1% in the year leading up to March 31, primarily due to foreign currency losses and underperformance in the Chinese market.
Challenges in the Asian Market
The decline in CPP Investments' Asia portfolio can be attributed to several factors:
Economic Slowdown in China: The real estate sector's challenges have negatively impacted consumer sentiment and market performance.
Foreign Currency Losses: Fluctuations in currency values have further affected returns from the region.
Strategic Shift: CPP Investments has indicated a cautious approach to expanding its footprint in Asia, preferring partnerships with local firms that possess the necessary resources.
Recent Layoffs and Strategic Changes
Su's departure is not an isolated incident; it follows a series of layoffs within CPP Investments' Asia business unit. Reports indicate that at least five investment professionals were let go in Hong Kong late last year, primarily from the private equity team. This trend suggests a tightening of operations and a reevaluation of investment strategies in the region.
Future Outlook
The future of CPP Investments' Asia strategy remains uncertain. Suyi Kim, the former global head of private equity, previously stated that the institution had no immediate plans for expansion in Asia. This cautious stance reflects the complexities of operating in a region marked by economic volatility and shifting market dynamics.
As CPP Investments navigates these changes, the leadership transition following Su's departure will be closely watched by industry observers and stakeholders alike. The institution's ability to adapt to the evolving landscape in Asia will be crucial for its continued success in private equity investment.
Sources
CPP Investments loses APAC PE head Su, Private Equity International.