Canadian Pensioners In £600m Motorsport Deals
Canada's biggest pension fund is plotting a double-swoop on the world's most prestigious motorsport series through investments worth about £600m, I have learned.
The Canada Pension Plan (CPP) is expected to announce that it is investing approximately £250m in new debt issued by the parent company of Formula One (F1) motor racing.
The investment will form part of a $1bn (£620m) bond issue organised by CVC Capital Partners, F1's largest shareholder, which will fund a dividend windfall for the sport's equity investors.
The other principal investors in the bond will be Waddell & Reed, which is also acquiring about £250m of the bond, BlackRock and the Principal Investment Area of Goldman Sachs, the Wall Street bank, insiders tell me.
CPP will also announce that it is paying about £320m for a roughly-40% stake in Dorna Sports S.L, the company which owns the rights to MotoGP and the Superbike World Championship, according to people familiar with its plans.
JP Morgan has been advising CPP on its investment in the motorcycling series, while UBS has been advising Bridgepoint.
That investment will follow an announcement earlier this month by Bridgepoint, the private equity group which controls the two motorbike disciplines, that it will merge their parent companies.
Dorna Sports (which CVC previously owned) holds the global broadcasting and commercial rights to 2036 to organise the FIM Road Racing World Championship Grand Prix, also known as MotoGP, while Infront Sports & Media organises the eni FIM Superbike World Championship.
The merger of the two companies' motorcycle racing interests is designed to exploit joint commercial opportunities and is seen by analysts as a shrewd move ahead of potential exit for Bridgepoint in several years' time.
The CPP investment values the motorcycling business at more than £800m, according to bankers.
During the last five years, Canadian pension funds have been among the most voracious buyers of British infrastructure and 'trophy' assets, acquiring stakes in companies ranging from Camelot, the operator of the National Lottery, to Anglian Water.
In 1997, the CPP Investment Board was established by the then finance minister, Paul Martin, to diversify public sector workers' retirement savings.
CPP's decision to buy £250m of F1's debt comes at an intriguing time for the sport. As Sky News revealed last week, the Texan teachers' pension fund is buying 3% of the sport in a deal that values it at around $9bn, with plans for an initial public offering now unlikely in the next year.
The Times reported that the board of F1's parent company had employed headhunters to identify a successor to Bernie Ecclestone. Egon Zehnder was asked to draw up a list of potential replacement during the spring, a fact that was disclosed in the draft prospectus for F1's stock market listing five months ago.
CVC and Bridgepoint declined to comment. CPP could not be reached for comment.