Pension fund deal activity plunges 81% YOY in Q3

Global pension fund involvement in deal activity dropped dramatically year over year in the third quarter, according to S&P Global Market Intelligence data.

Pension fund sponsors were involved in $6.85 billion worth of disclosed transactions in the third quarter, a year-over-year decline of more than 81% from $36.40 billion in the third quarter of 2021. Total deal value with pension funds' participation did rise sequentially by 88%

Of the 31 deals completed by pension funds during the third quarter, the values of 10 transactions were disclosed. Private equity firms were involved with four of those deals.

The largest transaction with its value disclosed was the $2.42 billion proposed acquisition of Indian independent power producer Sembcorp Energy India Ltd. The investor team behind the takeover included Oman government pension plan sponsor Ministry of Defence Pension Fund.

Canada Pension Plan Investment Board, or CPPIB, was the most active pension fund sponsor during the quarter, taking part in three deals totaling more than $1.58 billion. The fund was a sponsor of the quarter's second-largest transaction, the $800 million funding round of Swedish financial technology startup Klarna Bank AB (publ).

Ontario Teachers' Pension Plan Board participated in two deals that totaled nearly $872.7 million. The pension fund was involved in the third-largest deal of the quarter, agreeing to acquire a 70% stake in Spark Towerco Ltd. in July.

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Tech, energy exposure falls

From Jan. 1 to Sept. 30, pension fund sponsor activity in the technology, media and telecommunications sector was down more than 57% year over year, while the energy and utilities sector saw a year-over-year decline of more than 86%.

The financials sector recorded a 5% increase in pension fund sponsor activity during the period.