Ontario Teachers’ Pension Plan (OTPP) is an independent organization responsible for managing the pensions for teachers in the province of Ontario. OTPP is one of the world’s largest institutional investors with net assets at ~$194Bn as of June 30th, 2018. The fund is home to one of the world’s largest pools of Private Capital, actively seeking opportunities for partnership and investments in companies looking to grow. Private Capital accounts for ~$32Bn in net investments with capital deployed through direct / co-investments and funds. In late 2016 OTPP, OTPP acquired the Canadian business of Constellation Brands (now Arterra Wine Canada), the largest wine producer and distributor of 100s of brands in Canada including Jackson-Triggs, Inniskillin, Robert Mondavi and Kim Crawford.

Gregg Meheriuk (Senior Principal, the Private Capital Group) engaged Arterra to develop a Value Creation Plan (VCP) that identified the key levers to drive growth in the business in excess of the original investment thesis.  Unlike many private equity firms, OTPP leverages a ‘Playbook’ early in an investment that aligns the Board of Directors on key questions to assess in the VCP. It then engages with the company to develop a detailed plan underpinning the investment.

Given that OTPP has approximately 50 companies in the Private Capital Group, Mr. Meheriuk leverages outside advisors to help develop the VCPs. After evaluating several consulting firms, from larger well-known consulting firms to boutique shops, the management team and Mr. Meheriuk selected Maven Associates to co-develop the VCP. They felt that Maven could deliver a high quality team of former Tier 1 consultants, utilize a more collaborative approach, and engage with the management team more effectively while remaining cost effective.

Over a six-month period, the Arterra management team, Maven and Mr. Meheriuk developed a VCP that helped identify several significant opportunities to drive EBTIDA that exceeded the initial investment thesis.  These drivers included pricing and promotion, new product development, operations and gaining operating leverage with the SG&A. Additionally, upon completion of the VCP, OTPP, along with management, operationalized the VCP by creating a robust project management process to ensure it captured the identified value.

A year later, OTPP continues to leverage the VCP to ensure Arterra Wines Canada achieves the value identified.

 

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