The Canada Pension Plan Investment Board (CPPIB) has officially announced that it has acquired a 39% stake in DORNA which operates the MotoGP events and the FIM World Superbikes Championship. The group did not disclose the price paid for their investment but Reuters says the price may have been around $518M.
Equally, the Pension fund also is said to have invested in a high-yield loan in Formula One for $400M:
“The pension fund manager, which boasts over C$165 billion ($165.41 billion) in assets, separately announced that it had closed a debt agreement with Formula One Group to finance $400 million of a $1 billion private high-yield loan.”
This is, effectively, a debt agreement in which the pension fund is loan and while the risk is higher, the returns are usually higher as well. With interest rates at an all-time low and no outlook for immediate reversal, many investors are looking for greater returns on their investments and this could be the prime reason the Teacher Retirement System of Texas and now the Canadian Pension fund are looking to the owners of F1 to invest in. The Reuters article did not say if there were other investments or shares purchased but the CPPIB said the investment represented a opportunity for “attractive risk-adjusted returns.”