RPT-CVCA-AimCo eyes up to C$700 mln in private equity deals

Thu May 26, 2011 8:12am EDT

* Alberta Investment warns of "silly" asset valuations

* Fund sees private equity investments in mid-market range

* It is focused on food, energy and raw materials

* Eyes ag-related logistics in Latin America

(Repeats to widen distribution)

By Pav Jordan

VANCOUVER, May 26 (Reuters) - The Alberta Investment Management Corp could spend as much as C$700 million ($715 million) on private equity acquisitions in the next 12 months, and as much as C$2 billion in the next three to four years.

AimCo's chief executive, Leo de Bever, told Reuters he was currently looking at as many as three potential deals globally and in the mid-market range. He said he has people on the ground looking at assets in at least three geographic areas.

"We've got two or three things on the go which, if they all come to fruition, could be between C$500 million and say C$700 million if they all fall into place," De Bever said on Wednesday in an interview as investors arrived for the annual Canadian Private Equity and Venture Capital Association (CVCA) conference, held this year in Vancouver.

"We think at least half of that will fall into place."

AimCo manages about C$70 billion in public pensions and other government funds for the oil-rich western Canadian province of Alberta.

The pension fund administrator has been an active acquirer in recent months and years, including the C$415 million, joint acquisition of Australian timber lands with New Forests Pty Ltd, announced in January.

The deal, one of the largest in Australia's forestry estate business, fit tidily into the fund manager's investment strategy of seeking assets related to food, energy and raw materials.

AimCo also made major investments in recent years in Precision Drilling Corp (PD.TO), Viterra Inc VT.TO and a six-lane toll road in Chile.

De Bever said AimCo was also looking healthcare services for investments and in Latin America was seeing opportunities in assets linked to supply-chain logistics in agriculture.

"In Latin America, farm production is often efficient, but transportation from the farm to the market is not. So there are a number of opportunities we are looking at that deal with logistics and integration of that supply chain."

AimCo has moved in recent years to more direct investing, but it still does some fund investing in geographies that are further from home and less familiar.

"In places like Southeast Asia, that's probably where we will spend our fund money," he said.

De Bever said AimCo does not plan to bid on Canadian real estate properties valued at about C$900 million and reportedly being put up for sale by private equity and real estate firm Blackstone Group (BX.N), which is one of its partner funds.

He said AimCo plans to trim its real estate holdings in certain areas to improve the average quality of its portfolio.

De Bever, a veteran of private equity investing, said he was worried about the growing enthusiasm for dealmaking as liquidity levels rise to pre-crisis levels. He warned firms could be hurt if they rush to deploy funds.

"There are a couple of things going on that sort of bother us. One is that in some sense, 2007/08 doesn't seem to have happened," he said, pointing to deal structures and debt financing not seen since before the global economic crisis.

"We wonder if that is going to lead to a whole bunch of silly deals."

($1 = 0.978 Canadian Dollars)

(Reporting by Pav Jordan; Editing by Matt Driskill)

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