Cordiant Capital Inc.


Cordiant Capital Inc.

Established in 1999 by Carl H. Otto, Ph.D. and David Creighton, Cordiant Capital Inc. is a manager of emerging market, private sector investments. With USD 2.2 billion in capital subscriptions across five emerging market funds, Cordiant counts amongst its clients some of the world’s largest institutional investors. Cordiant’s investing experience flows throughout the capital structure and across all stages of an asset’s lifecycle, from Greenfield projects to mature and stable operating businesses.

Contents

Type Privately owned company
Founded 1999
Founders Carl H. Otto, Chairman Emeritus

David Creighton, President & CEO

Headquarters Montreal, Quebec, Canada
Products Emerging Market Private Sector Investments
Total Subscriptions $2.2 billion
Website http://www.cordiantcap.com

Background

Cordiant Capital Inc. (commonly referred to as Cordiant) is a Montreal-based fund manager specialising in emerging markets. Cordiant’s funds are primarily focused on providing senior and subordinated debt financing to well established businesses in emerging and high growth markets around the globe. Since inception, the firm has managed USD $2.2 billion in capital subscriptions from institutional investors.

Founded in 1999, Cordiant was the first Canadian investment management firm to introduce institutional investors to private sector debt in emerging markets. Cordiant was founded by Carl H. Otto, Ph.D., CFA[1] and David Creighton. Dr. Otto is also the founder of the Canadian investment counsel firm AMI Partners, Penreal Advisors, Fleming Canada Partners and Quantitative Capital. David Creighton spent 13 years in London as Vice President and Director of BMO Nesbitt Burns’ international fixed income sales team before returning to Montreal to drive the launch of Cordiant’s first emerging market loan fund.

The History

Throughout his career, Dr. Carl Otto has been a recognized leader within the Canadian financial community at the forefront of finding new sources of assets to increase pension funds’ portfolio diversification. He was the first to introduce Canadian pension funds to real estate, overseas equity markets and structured index products[2].

In the 1990s, Dr. Otto believed that the proliferation of structured products would lead to a dearth of fixed income products. As a result, he began to explore opportunities for pension funds to participate in financing projects in emerging economies by partnering with International Financial Institutions. His objective was to create the first investment management firm to introduce institutional investors to a lower risk diversified pool of private sector debt in emerging and high growth markets[3].

To realize this objective, Dr. Otto partnered with David Creighton, who had accumulated extensive experience in the field of international capital markets during more than a decade with BMO Nesbitt Burns in London, UK. Mr. Creighton led the expansion of the Bank’s institutional business in Europe, Africa, the Middle East and Asia during the late 1980s and the 1990s. In addition to valuable emerging market expertise and a profound respect for the entrepreneurial spirit that drives these economies, David Creighton brought with him the conviction that exceptional financial returns could be achieved in emerging and high growth economies[4]. At the same time, the influx of investment dollars would foster sustainable social and economic development in these countries.

Investment Funds

Emerging Market Debt Funds

Cordiant Emerging Loan Fund III, LP
Vintage 2007
Focus Emerging Markets Senior and Subordinated Loans
Size USD 460,000,000
International Finance Participation Trust (2004)
Vintage 2005
Focus Emerging Markets Senior Loans
Size USD 370,000,000
International Finance Participation Trust
Vintage 2001
Focus Emerging Markets Senior Loans
Size USD 360,000,000

Since the firm’s inception, Cordiant has raised and managed three emerging market debt funds totalling USD 1.19 billion in capital subscriptions.

In 2001, Cordiant raised USD 360 million for its first Emerging Loan Fund, IFPT (2001), from Canadian institutional investors. IFPT (2001) invested in loans to emerging market borrowers[5]. In 2004/05, Cordiant raised USD 370 million for its second Emerging Loan Fund, IFPT (2004), from Canadian, Dutch and British institutional investors[6]. Finally, in 2007/08, Cordiant raised USD 460 million for its third Emerging Loan Fund, CELF III, from a broadening group of North American and European institutional investors[7].

From their inception to June 30, 2010, Cordiant’s Emerging Loan Funds have invested a total of USD 1.61 billion in 186 loans. Their portfolios have been diversified across 149 borrowers, 47 countries and 31 sectors.

Emerging Market Private Equity Funds

Canada Investment Fund for Africa[8]
Vintage 2006
Focus Pan African Private Equity
Size USD 212,000,000

In 2004, Cordiant was selected to co-manage the Canada Investment Fund for Africa (commonly referred to as CIFA). By 2006, USD 212 million had been raised for CIFA, including CAD 100 million from the Canadian government[9]. CIFA provides risk capital to commercially viable businesses across the African continent to generate economic growth, attract investors and build momentum for increased trade and investment throughout the continent, laying the groundwork for greater socio-economic development. CIFA has invested a total of USD 180 million in 16 companies and two regional small and medium enterprise funds operating in eight countries and nine sectors.

The Infrastructure Crisis Facility Debt Pool[10]

ICF Debt Pool
Vintage 2009
Focus Global Infrastructure Senior and Subordinated Loans
Size EUR 500,000,000

In December 2009, Cordiant was chosen following a competitive selection process to manage the G20-led Infrastructure Crisis Facility-Debt Pool[11], a newly created fund intended to address the long-term financing vacuum in the emerging markets caused by the on-going global economic downturn. The €500 million fund was launched at the World Bank’s 2009 Annual Meeting and is aimed at high quality infrastructure projects in the emerging markets. The ICF-Debt Pool is currently funded by the Federal Republic of Germany, acting through KfW. From its inception to June 30, 2010, the ICF-Debt Pool has reviewed 22 infrastructure investment opportunities representing a potential total investment of USD 835 million.

References


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