Canadian pension fund bets big on world of motor sports

Fri Oct 26, 2012 2:41pm EDT
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(Reuters) - Canada Pension Plan Investment Board, one of the country's top pension fund managers, on Friday outlined two major investments in the world of professional motor racing.

CPPIB, known for staid investments in infrastructure projects, shopping centers, private equity firms and the like, said it had stuck a deal to buy a big stake in motorcycle grand prix organizer Dorna and was also financing a large chunk of a loan to Formula One Group.

The pension fund manager said it had signed an agreement to acquire a 39 percent stake in Dorna - organizer of MotoGP events and the FIM World Superbikes Championship - from private equity firm Bridgepoint.

CPPIB did not disclose the purchase price, but a source familiar with the deal said it was about 400 million euros ($518 million).

The stake sale is another example of how large pension funds are buying into businesses alongside private equity houses as they look for better returns from growing companies with good long-term prospects.

The $100 billion Texas Teachers' pension fund last week agreed to buy a 3 percent stake in the Formula One motor racing business, investing alongside private equity house CVC.

Madrid-based Dorna organizes 18 races in 13 countries and generates revenues from television broadcast contracts, sponsorship and advertising as well as corporate hospitality and related services.

Bridgepoint bought Dorna in 2006 in a deal that valued the company at about 500 million euros. Dorna recently bought the FIM World Superbikes Championship for an undisclosed sum.

The sale of a stake to CPPIB means Dorna has earned Bridgepoint and its investors more than three times the sum they put into the company, the source said.   Continued...