Teachers’ Merchant Bank, the private equity arm of the Ontario Teachers’ Pension Plan, announced Friday a $550 million investment in a $2.8 billion private equity portfolio purchased from Deutsche Bank. Teachers’ Merchant Bank will own approximately 20% of the portfolio.

The CPP Investment Board has also invested in the portfolio, which consists of equity interests in more than 80 private companies in a wide range of industries in the United States and Europe.

Teachers’ Merchant Bank co-led the transaction with an international group of private equity investors that includes NIB Capital Private Equity, CPP Investment Board, HarbourVest Partners, Paul Capital Partners, Bregal Investments, and the Yucaipa companies. Deutsche Bank will retain a 20% interest in the portfolio.

The acquisition is being structured through a newly formed limited partnership called MidOcean Partners LP, headed by Ted Virtue and Graham Clempson and the former senior management of DB Capital Partners, the private equity arm of Deutsche Bank.

“This well diversified and successful portfolio fits our growth strategy perfectly, adding high quality investments to expand our private equity portfolio,” said Jim Leech, Senior Vice-President of Teachers’ Merchant Bank.

The $2.8 billion portfolio consists of successful late-stage private equity investments in the U.S. and Europe. In Europe, the portfolio includes Center Parcs, United Biscuits, Lecta and Jefferson Smurfit. In the United States, principal investments include Jostens, Prestige Brands, Noveon, and Jenny Craig.

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