Stone Point Capital ("Stone Point") and KKR & Co. L.P. (NYSE: KKR) today announced the addition of CPPIB Credit Investments Inc. ("CPPIB Credit"), a wholly-owned subsidiary of Canada Pension Plan Investment Board ("CPPIB"), as a joint venture partner and investor in MerchCap Solutions LLC ("MCS" or the "Company"), formerly known as KKR-SPC Merchant Advisors LLC. Formed in August of 2012, the Company provides principal and agency-based capital markets services to sponsor-backed and corporate mid-market companies as well as principal investments to support its client needs.
In addition to the $300 million of capital previously committed by Stone Point and KKR, CPPIB Credit will commit an additional $50 million of equity to MCS to support its business. CPPIB has initially earmarked up to $2 billion of capital for direct investment at its discretion in middle market debt transactions and other non-traditional corporate lending opportunities arranged for clients of MCS. Mark Jenkins, Head of Private Debt for CPPIB, will join the board of directors of the Company as well as its Strategic Development and Capital Allocation Committees. The day-to-day origination, execution and underwriting activities of the Company will continue to be carried out by KKR’s capital markets employees.
"This investment is an excellent opportunity to expand CPPIB’s Private Debt portfolio into the middle market, an attractive and underserved market segment," said Mark 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. We look forward to partnering alongside KKR and Stone Point who are longstanding, well-aligned partners of ours."
"We are excited to expand our MCS partnership with the addition of CPPIB, an exceptional pension fund with a long investment horizon and deep investment and market expertise that will have clear benefits for MCS’s targeted client base. With CPPIB, our company will be even better suited to helping clients find attractive capital markets solutions," said Chuck Davis, Co-Founder of Stone Point.