(Bloomberg) -- One of the biggest purchases this year in the private equity secondaries market marks the arrival of a major new institutional investor.
For almost 20 years, the Mastercard Foundation has been one of the world’s most successful investors, based on holding just one stock: Mastercard Inc. Now it has a new mandate to pare that stake, valued at roughly $50 billion, and diversify into a range of assets.
So far this year, that has meant starting a money-management arm and attracting talent from some of Canada’s biggest pension plans. Now, Mastercard Foundation Asset Management Corp., which debuted this year, is buying private equity stakes for a discount.
The board of Eastman Kodak Co.’s pension plan agreed to sell private equity ownership interests and other illiquid assets valued at $764.4 million to the Mastercard Foundation for $550.6 million, according to a regulatory filing. The sale is expected to be completed at year-end.
MFAM’s board features a roster of big names in Canadian finance, including Lynn Patterson, a former Bank of Canada deputy governor, and Jim Leech, who was chief executive officer of Ontario Teachers’ Pension Plan for more than six years until retiring about a decade ago.
The asset manager’s chief investment officer is John Barker, who previously held that role for more than a decade at health-care system Mass General Brigham. Before that, he was a managing director at Harvard Management Co.
Toronto-based MFAM has been on an expansion drive and building out its team, attracting employees from OTPP and other Canadian pension plans. Its leaders include Chief Technology Officer Dan Houle and Danilo Simonelli, who joined as managing director after almost 20 years at Ontario Teachers’.
MFAM is currently Mastercard’s biggest shareholder, with a stake of about 10%. Barker plans to diversify the portfolio over the next seven years, unloading 13% to 15% of Mastercard stock each year. MFAM will initially partner with third-party managers before considering direct investment, Barker said in a May interview.
The shares, donated to the foundation around the time of Mastercard’s 2006 initial public offering, have climbed more than 13,000% since then, making it one of the S&P 500’s best performers in that span.
The foundation’s charitable efforts include working to help young people in Africa and indigenous children in Canada.
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