Dan Primack of Axis Pro Rata reports lawsuit highlights private equity's CV conflict: 

A Middle Eastern sovereign wealth fund last month sued to stop a Houston-based private equity firm from selling a portfolio company to a continuation vehicle, with both sides yesterday agreeing to enter arbitration.

• The deal is on hold. For now.

Why it matters: This dispute gets at the fundamental conflict between LPs and GPs when it comes to CVs, which may have just peaked, if you boil away all goodwill and assumption of positive intent.

On the docket: Abu Dhabi Investment Council is a limited partner in PE funds raised in 2011 and 2014 by Energy & Minerals Group. They both hold stakes in Ascent Resources, a large natural gas company that also counts First Reserve among its investors.

• ADIC claims that EMG decided that it could maximize its value for Ascent via a CV strategy.
• It then alleges that EMG tried to force an LP vote on very short notice, provided different data to different investors, and refused to let the LPs confer in private. ADIC also casts doubt on EMG obtaining the requisite votes it claims to have obtained.
• Neither side responded to Axios' request for comment.

The big picture: General partners often claim that they form CVs for their best portfolio companies, the ones they just can't yet bear to part with. Almost as a favor to LPs desperate for liquidity ("We're not selling, but if you need to...").

• LPs, however, are often skeptical but feel boxed in. If they don't participate, might they be blackballed in the next fundraise?
• There certainly are amicable CV situations in which everyone expects to benefit, but there's just as many that create LP unease.

Zoom in: ADIC's complaint, filed in Delaware Chancery Court and recently unsealed, lays out a different narrative. It alleges that EMG told existing LPs that Ascent was in bad shape, unable to go public or be sold, while telling prospective CV investors the opposite.

• Moreover, ADIC claims that the CV would have reset management fees and carry on Ascent in a way that would have benefited the general partner, which is generally frowned upon.
• It's also not too surprising, given that EMG hasn't raised a new fund since 2019 (i.e., the fee stream is running dry).

Look ahead: An arbiter is expected to render a final decision by Feb. 27, 2026, before which EMG has pledged not to complete the CV transaction.

The Financial Times also reports private equity’s hot ‘continuation’ trade leaves some feeling singed:

A recurring theme in 2025 in the world of private equity is “keeping the wolf from the door”. For companies on the brink of running out of money, that manifests through the increasing popularity of so-called liability management exercises, where zombie companies are temporarily kept upright by tapping bountiful debt markets and strong-arming investors.

For companies in private equity portfolios that are not quite hobbled but not exactly thriving either, there are continuation vehicles. These are new funds created by the same private equity sponsor that can purchase a business when the original fund is at its contractual end. A way, in effect, of keeping a promising company in the fold.

A general rule in finance is that where there’s innovation there’s litigation. Liability management has produced a glut of US court cases; now continuation vehicles look likely to follow. A Middle Eastern wealth fund, the Abu Dhabi Investment Council, has sued a private equity firm, Energy & Minerals Group, which wants to shift a natural gas driller it owns from one pocket to another.

The problem, ADIC says, is that the deal is great for the private equity firm but not for the investors in the original fund. It contends the company in question, Ascent Resources, could be worth more than $7bn in a regular sale or an initial public offering, yet in fact the stake being transferred by EMG suggests a valuation of just $5.5bn.

Such blow-ups are inevitable when a buyout firm is on both sides of the deal, as is the case where continuation vehicles are involved. There are certain safeguards, to be sure: transparency, independent advisers, “fairness opinions” and fiduciary duty. Some claims of wrongdoing might be meritorious and others not. Where the original investors don’t get a windfall, disappointment will often ensue.

ADIC describes being forced into a “Hobson’s choice”. It could put in new cash, or roll over its investment on terms it described as “materially worse than the status quo”. It also said in its lawsuit that EMG had not tried hard enough for third-party, arms-length deals — though the Financial Times has reported other buyers passed on Ascent, believing the price too rich.

Private equity groups need to worry not just about selling assets to continuation funds, but the deals that come after. Where a continuation vehicle later makes a big profit by exiting its investment, it will spur claims — sincere or otherwise — that the limited partners in the first fund were taken for a ride. Some sponsors, including Clayton Dubilier & Rice, have netted sizeable profits through a second deal.

There are also examples that work the other way around. Clearlake Capital’s Wheels Pro went bankrupt in a successor fund. More recently, portable toilet company ISS, in a continuation vehicle backed by Fortress, Blackstone and Ares, is expected to be a wipeout, Bloomberg has reported.

Continuation vehicles, like liability management exercises, address real problems over timing and liquidity. Secondary funds, which buy whole slices of private equity portfolios, are another example.

But while the Masters of the Universe are good at navigating deadlines and cash crunches, they’re not always as deft at placating investors who feel they’ve got the rough end of the stick. For those people, litigation may continue to feel like the best medicine.

The person who sent me Dan Primack's comment also shared their perspective:

It’s a noteworthy case: continuation vehicles have become commonplace but they remain fraught with embedded conflicts, and this lawsuit puts several of those tensions in sharp relief.

They added: 

... for background, Alain Carrier (formerly CPPIB infrastructure/international, then CEO of Bregal Investments) has recently joined ADIC as head of private equity. You can likely expect them to take a more active stance going forward.

I don't personally know Alain Carrier but he has a great reputation and I'm sure as Head of PE at ADIC he will lean on GPs heavily, especially if he feels it's not in their best interests. 

These continuation vehicles have mushroomed recently and not surprisingly, they're not always in the best interest of LPs who want to see GPs realize and collect the maximum gain. 

2025 hasn't been a great year for private equity. The environment is improving as rates drop, exits increase but there are a plethora of issues the industry needs to contend with.

This lawsuit against EMG will be monitored closely by LPs and GPs.

If ADIC proves the continuation vehicle isn't in their best interest, then this case might set legal precedence.

We shall see and while not all continuation vehicles are bad, you really need to do proper due diligence or risk having the wool pulled over your eyes. 

At the very least, understand the challenges and potential conflicts of interest. 

It doesn't surprise me that a new report finds continuation vehicles have peaked. 

Below, Steve Balaban discusses everything you need to know about continuation funds.

Sean Conlon and Pia Singh of CNBC report the S&P 500 closes higher, notching four-day win streak and nearing record after light inflation reading:

The S&P 500 edged higher on Friday, securing its fourth straight winning day, as traders digested inflation data that could provide further incentive for the Federal Reserve to lower interest rates next week

The broad market index closed 0.19% higher at 6,870.40, putting the index about 0.7% off its intraday record. Friday also marked its ninth positive session in 10. The Nasdaq Composite increased 0.31% to settle at 23,578.13, while the Dow Jones Industrial Average climbed 104.05 points, or 0.22%, to end the day at 47,954.99.

The market sorted through a fresh slate of economic releases Friday. The Commerce Department said that the core personal consumption expenditures price index for September – which was delayed due to the record-setting U.S. government shutdown – showed an annual rate of 2.8%, lower than the 2.9% Dow Jones estimate. Core PCE’s 0.2% rise on the month was in line with expectations, as were the monthly and annual inflation readings for headline PCE.

Also on Friday, the University of Michigan’s consumer survey, a report that provides a glimpse at sentiment as well as the view on inflation over the near and longer term, came in higher than expected for December.

The PCE report, which serves as the Fed’s primary inflation gauge, gives the central bank its final inflation view before Wednesday’s interest rate vote. With inflation being mild, jobs remains more in focus after recent reports showed signs of weakening in the labor market. Investors are hoping that this will influence the central bank to lower its benchmark rate by a quarter percentage point when it announces the decision Wednesday.

Traders are pricing in an 87% chance of a cut next Wednesday, far higher than just a couple weeks ago, according to the CME FedWatch tool. The key fed funds futures rate is currently targeted between 3.75%-4%, trading near the high end of that range amid ongoing pressures in short-term funding markets.

“I think it really just solidifies what the market’s already been pricing in, which is almost certainty of a cut for next week,” David Krakauer, vice president of portfolio management at Mercer Advisors, told CNBC. “If inflation does continue to stay somewhat relatively tame and [is] potentially decreasing, then what’s the outlook for more rate cuts into early next year?”

With expectations running high for a rate cut, Krakauer doesn’t necessarily believe that it will serve as a catalyst for stocks to move higher as the new year approaches. That said, he still thinks the market is in a healthy position for some upside, at least enough to reach new highs on the S&P 500.

“It may be a steady move, it may be a choppy move, but I certainly see the path for equities forward as being very positive,” he said.

Stocks posted gains for the week. The S&P 500 finished up 0.3% week to date, while the Nasdaq and 30-stock Dow have added almost 1% and 0.5%, respectively.

During Friday’s trading session, Netflix shares seesawed after initially seeing sizable losses earlier in the day following the company’s announcement that it struck a deal with Warner Bros. Discovery to buy its film and streaming assets for $72 billion — a transaction that’s expected to close in 12 to 18 months. Netflix shares were nearly 3% lower, while shares of WBD jumped more than 6%.

The streaming giant’s stock came off its lows of the session after a senior administration official told CNBC that the Trump administration views the deal with “heavy skepticism.”

Rian Howlett , Karen Friar and Ines Ferré of Yahoo Finance also report the S&P 500, Nasdaq notch fourth day of gains with next week's Fed meeting in focus: 

US stocks moved higher on Friday as Wall Street digested a cooling in the Federal Reserve's preferred inflation gauge, increasing the odds that the central bank will cut rates next week.

The S&P 500 (^GSPC) rose 0.19%, within striking distance of its first record close since October. The Nasdaq Composite (^IXIC) also gained about 0.3%, eyeing its ninth positive close in 10 sessions. The Dow Jones Industrial Average (^DJI) rose around 0.2%, following a mixed Thursday session for the gauges.

Investors continue to bet heavily on a quarter-point interest rate cut from the central bank next Wednesday. Traders are pricing in 87% odds of a move lower, compared with 62% a month ago, according to CME FedWatch.

On Friday, a delayed reading of the PCE price index showed inflation rose about as expected in September. The "core" PCE index — the Fed's favored price gauge — cooled slightly, rising 2.8% on an annual basis. Meanwhile, US consumer confidence rose for the first time in five months as respondents' inflation expectations improved.

The jobs market, meanwhile, has presented more of a mixed bag of data this week. A Challenger report on Thursday showed US companies cut 71,000 jobs last month, the worst November print since 2022. Yet new weekly jobless claims fell to their lowest since September 2022, reinforcing the picture of a labor market cooling gradually rather than rapidly.

Meanwhile, news landed that Netflix (NFLX) will buy Warner Bros. Discovery's (WBD) studios and its streaming unit for $72 billion, following a weeks-long bidding war. Netflix stock ticked down 3%, while WBD shares moved 6% higher.

In earnings, Hewlett Packard Enterprise (HPE) stock rose slightly after the server maker's quarterly sales outlook missed high AI-fueled expectations.

S&P 500 hovers near record, while bitcoin has decoupled from stocks

S&P 500 (^GSPC) was a stone's throw away from reaching a new high on Friday, while bitcoin (BTC-USD) tumbled below $90,000 per token.

The world's largest cryptocurrency is on pace to close out the year decoupled from stocks for the first time since 2014.

Bitcoin is down roughly 3% year-to-date compared the the S&P 500's 17% gain.

It hovers about 30% off its all-time high, north of $126,000 in October. 

Alright, a strong week in stocks all based on expectations the Fed will cut 25 basis points next week. I have no doubt the Fed will cut as employment is trending lower but given the stock market is a leading indicator and all stock indices including small caps are flirting with record highs, it's hard to envision more rate cuts in the new year. Interestingly, Bank of America strategist Michael Hartnett is warning that a dovish Fed rate cut could imperil the rally: 

“Only thing that can stop Santa Claus rally is dovish Fed cut causing a selloff in long-end,” Hartnett wrote in a note, referring to Treasuries with a longer maturity date. US stocks have rallied as investors bet the central bank would reduce rates further to shore up a softening labor market. Wagers on a quarter-point cut at the meeting on Dec. 10 have soared to over 90% from 60% just a month prior, according to swaps markets. Traders have also fully priced in three cuts by September 2026. 

The S&P 500 is now about 0.5% away from its October peak, and seasonal trends generally bode well for a year-end rally. However, this time the market faces two risk events in the form of key jobs and inflation reports due later in December after being delayed by the government shutdown.

Hartnett and his team also note that the US administration is likely to intervene to stop inflation from running hot and the unemployment rate rising to 5%. They recommend positioning for that possibility by buying “inexpensive” mid-caps into 2026. They also see the best relative upside in sectors linked to the economic cycle, such as homebuilders, retailers, REITs and transportation stocks.

The strategists had reiterated a preference for international equities through 2025, a call that proved correct as the S&P 500’s  advance trailed a  rally in the MSCI All-Country World ex-US index. 

So, is Hartnett right, will stocks sell off if it's a dovish rate cut? I wouldn't be surprised if there's a "sell the news" initial reaction but in the weeks following the December rate cut, I expect stocks to continue grinding higher until March, with volatility of course. The reality is with fiscal and monetary policy being accomodative, it's hard to envision stocks selling off right now as we head into the new year.  And even though US Treasuries sold off this week, I expect yields to behave as employment growth and inflation expectations remain muted. The bigger story today was in Canada: 

A much bigger selloff in Canadian government bonds Friday, sparked by stronger-than-expected employment data, was a factor. But US yields had already risen to weekly highs.

The US 10- and 30-year yields climbed more than 12 basis points since Nov. 28, with the 10-year closing at 4.14%.

The move held after the delayed release of September personal income and spending data — which includes the inflation gauge the Fed aims to keep around 2% — showed that it accelerated to 2.8%, as economists estimated. Several Fed policymakers have said the inflation trend should forestall rate cuts.

I know a really good Canadian fixed income trader who got dinged today but I agree with him, employment trends in Canada are not strong, the data was stronger than expected because of part-time workers and I'd remain long Canadian bonds here/ short the loonie. What else? The big news today was Netflix (NFLX) will buy Warner Bros. Discovery's (WBD) studios and its streaming unit for $72 billion, following a weeks-long bidding war. Netflix stock lost 3% today, while WBD shares gained 6%. Is Netflix a buy here? I have no idea what will happen with this acquisition as it will face political and regulatory scrutiny but it's a good time to initiate a position in Netflix but don't expect it to pop back up to a new high any time soon (can go lower before it stabilizes): 
With or without Warner Bros. Discovery, Netflix will remain a global powerhouse and a defensive tech stock that does well even in a downturn (the last hing people cut in desperation in their Netflix). But the stock moves violently to the downside sometimes like it did back in 2022 so you need to remain alert and humble even if I think a nice buying opportunity is emerging here. What else? On Wednesday Oracle reports and we shall see the post-earnings reaction as the stock has sold off recently quite a bit on debt concerns: 
It could pop back over $250 or drop back to retest its recent low of $185, nobody really knows, but sentiment is so bearish on this stock that I wouldn't be surprised if it reaccelerates up if earnings are good. Either way, it's a leader in ts field and just like Netflix, you need to see these selloffs as an opportunity to add or initiate a position (imho). Of course, this week was all about banks (US and Canadian) with a lot of them making new highs. I invite you to carefully scroll down the list of stocks making a new high here (you should be doing this every single trading day to see where strength lies).  Lastly, I know there is a lot of angst on the spillover from surging Japanese bond yields but I agree with Dhaval Joshi of BCA Research, the idea that, past a certain point, Japanese government bond yields could trigger a global stock-market meltdown is pretty far-fetched: 

"There isn't a critical level [for Japanese bond yields] that is going to cause a tsunami of capital flooding back to Japan. That's not going to happen," Joshi said.   

I've seen this "yen carry trade unwind" story so many times in the past 25 years that I tend to be more skeptical about a potential global stock market rout from rising Japanese bond yields. Alright, let me wrap this up with the best performing US large cap stocks this week:  Below, Andrew Davis, Bryn Mawr Trust Advisors SVP & Head of Macroeconomic Research, joins 'Fast Money' to talk the current state of play in teh market and how to position going into next year.

Also, Jeremy Siegel, Wharton professor emeritus and WisdomTree chief economist, joins 'Closing Bell' to discuss Siegel's thoughts on equity markets, if investors are afraid of missing out on equity markets growth and much more.

Lastly, Bloomberg's Asia Trade discusses how Japan's 2-year yield hit the highest level since 2008.

Jacques Poitras of the CBC reports N.B. pension fund managers accused of costing tech investors millions:

The company that manages billions of dollars in pension funds for thousands of New Brunswick public sector employees and retirees is being accused of causing financial losses for hundreds of investors across Canada.

Fredericton-based Vestcor Inc. and one of its senior executives are the targets of a petition filed in British Columbia that is seeking court approval for a class-action lawsuit.

The company is accused of falsely inflating the value of a corporate merger between two technology companies.

Vestcor invests the pension contributions of New Brunswick civil servants and other public sector employees in various investment vehicles, including stocks.

According to the petition application, Vestcor was the majority shareholder in Exro Technologies, and “orchestrated and significantly influenced” Exro’s 2024 merger with SEA Electric Inc., in which Vestcor also owned shares.

Exro paid $300 million to acquire SEA Electric after telling its shareholders that SEA would make $200 million in profits in 2024 — a figure that proved “delusional,” the court filing says.

“These facts and circumstances reflected within those representations were the basis of the grossly inflated valuation assigned to SEA Electric,” it says.

“Those purported facts and circumstances did not exist, or the manner of their representation in the material change report was false or misleading.”

It alleges Vestcor and its vice-president of equities Mark Holleran “did so in order to manage, or salvage, their significant investment in SEA Electric.”

The assertions in the petition have not been proven in court and Vestcor has yet to file a response.

“Our legal team is currently evaluating the merits of this lawsuit,” CEO Sean Hewitt said in an emailed statement.

“The claims have not been tested in court,” he added. “We have no reason to believe in their veracity.”

Sage Nematollahi, the lawyer who filed the petition on behalf of two shareholders, told CBC News that Vestcor “has lost a lot of money” as Exro’s majority shareholder, tying up “significant funds from pensioners in New Brunswick [with] this investment that has not done great.” 

But in Hewitt's statement, he said the impact was “negligible” to the overall performance of Vestcor’s investment portfolios, estimating it at a fraction of one per cent of the total.

“Given the robust funded positions of our clients’ pension plans, and continued strong investment performance, there is no impact to the monthly income of pensioners,” he said.

The company managed a total of $23 billion in 2024 — an increase of $2 billion over 2023.

Vestcor, owned by the province’s two largest pension plans for civil servants and teachers, was created in 2016, replacing a government-owned agency.

It handles retirement plans for hospital workers, nurses, Crown corporation employees, provincial court judges, MLAs and others. It also manages other investment funds, including the University of New Brunswick’s endowment. 

Exro was delisted by the Toronto Stock Exchange in October.

The company revealed in November 2024 that its revenue projections would fall far short of what it had claimed, recording a loss of $226 million, including a $211 million loss to the value of SEA Electric’s assets.

The losses led to “the complete collapse” of Exro, the filing says.

The petition alleges that Vestcor and Holleran “acted in bad faith and/or conflicts of interest” as “de facto directors and/or officers” of Exro.

The petition was filed by two shareholders, British Columbia resident Bryan Irwin, who held  27,500 common shares worth $22,000 at the time of the merger, and Ontario investor Mike Zienchuk, who had 900,000 shares worth an amount not disclosed in the court filing.

Nematollahi told CBC News that about 500 other shareholders have contacted his office about joining the lawsuit if it is certified as a class action case.

“There could be thousands of shareholders out there,” he said.

Zienchuk and another investor, Allan Crosier, have also filed a lawsuit in Alberta against Exro, two former company officials, the company’s financial advisors and its insurance underwriters.

Exro billed itself as a clean tech company that would design and build power electronics to improve the efficiency and cost-effectiveness of electric vehicles and energy storage systems. 

Vestcor was a majority shareholder in Exro at the time of the merger and also held 14.3 per cent of preferred stock in SEA, meaning Vestcor was “acting both as a seller and a buyer,” the filing says. 

I read this earlier this week and to be honest, I didn't contact Jon Spinney, CIO at Vestcor who I know because the allegations in the article are absurd.

What do I mean? Vestcor "orchestrated" Exro Technologies'  buyout of SEA Electric Inc to save it on its book? It just seems like such nonsense. 

The only thing leading to this accusation was this:

Vestcor was a majority shareholder in Exro at the time of the merger and also held 14.3 per cent of preferred stock in SEA, meaning Vestcor was “acting both as a seller and a buyer,” the filing says.  

To which I say so what? It's not like Vescro forced Exro to merge with SEA.

But this is the part that really caught my BS detector:

Sage Nematollahi, the lawyer who filed the petition on behalf of two shareholders, told CBC News that Vestcor “has lost a lot of money” as Exro’s majority shareholder, tying up “significant funds from pensioners in New Brunswick [with] this investment that has not done great.” 

But in Hewitt's statement, he said the impact was “negligible” to the overall performance of Vestcor’s investment portfolios, estimating it at a fraction of one per cent of the total.

“Given the robust funded positions of our clients’ pension plans, and continued strong investment performance, there is no impact to the monthly income of pensioners,” he said. 

I categorically refute claims that Vestcor is losing or has lost a lot of money. Complete and utter nonsense!

Back in April,  I went over Vestcor's solid 2024 results with CIO Jon Spinney and they were truly excellent on all fronts. You can read that comment here.

Moreover, as CEO Sean Hewitt notes, the loss from Exro's implosion was negligible so this story is much ado about nothing.

Basically, Sage Nematollahi (featured above), the lawyer representing plaintiffs used some contacts of his at CBC to make a big stink about Exro's implosion trying to tie it to Vestcor, making all sorts of unfounded and in some cases completely false accusations.

These lawyers are a dime a dozen in the securities field, typically they make all the money and recover little to no funds for their clients who subscribe to a class action lawsuit after a stock collapses.

Anyways, Vestcor will fight these allegations in court and if they are proven guilty of any wrongdoing, I will let my readers know.

I think this article is a bunch of nonsense that Jacques Poitras of the CBC got suckered into reporting (warning to all reporters, if unsure, before publishing contact yours truly, I will set the record straight).

More importantly, I want civil servants and teachers in New Brunswick to know that Vescor is doing an excellent job managing the assets of their pension plans.

Don't let this negative CBC article lead you to conclude otherwise.

Below, learn more about Vestcor and what it does. It's the most important pension fund in that region of the country and they are doing great work in my opinion. 

Also, Keystone Financial made a clip on whether Exro has a chance at recovery. Take the time to watch this, he covers all the details well.

On Tuesday, OMERS Private Equity announced the sale of CBI Health’s home care business to Extendicare:

• Transaction delivers value to OMERS members and positions company for expanded patient care

Toronto — OMERS Private Equity is pleased to announce that Paramed Inc. , a wholly-owned subsidiary of Extendicare Inc. (TSX: EXE) has signed an agreement to acquire CBI Health LP’s (“CBI Health”) home care business, which operates under CBI Home Health LP (“CBI Home Health”). The closing of the transaction is expected to be completed in the first quarter of 2026 pending final regulatory and related approvals.

Since its acquisition of CBI Health in 2011, OMERS Private Equity has worked closely with the leadership team to grow the company into one of the largest providers of integrated health care services, including physiotherapy, rehabilitation services and home care services.

CBI Home Health, the company’s home care division, has also experienced remarkable growth, expanding its team from 1,800 employees to 8,500 and delivering over 10 million hours of care annually across seven provinces.

“The investment that OMERS made in CBI Health really launched our direct buyout investment efforts almost 15 years ago. This transaction marks a successful milestone for OMERS Private Equity with a strong realization enabled by expanded patient care and clinical excellence.” said Mark Van Wart, Managing Director and Head of Healthcare, OMERS Private Equity. “CBI Health formed the basis of a 15-year successful track record in healthcare investing. We continue to look for ways to support CBI Health’s ongoing growth and delivery of high-quality healthcare outcomes for patients across Canada.”

OMERS will remain a majority owner of CBI Health, supporting ongoing growth, innovation and excellence in the physiotherapy and rehabilitation services sector.

“As CBI Health moves into the future, we are fortunate to have built a strong partnership with OMERS over the last 15 years and we are thankful that partnership will be continuing,” said Jon Hantho, CEO of CBI Health. “The sale of our home care business provides meaningful capital to support the ambitious growth plans we have in physiotherapy and rehabilitation services that is grounded in clinical excellence, exceptional client experience and the best team members.”

“OMERS Private Equity is unwavering in our commitment to delivering meaningful value and upholding the pension promise for our more than 640,000 plan members,” said Alexander Fraser, Executive Vice President & Global Head of Private Equity at OMERS. “Our collaboration with the exceptional leadership team at CBI Health demonstrates our intentional investment in enhanced healthcare services, coverage and outcomes in Canada. Extendicare is well positioned to continue the service excellence at CBI Home Health.” 

When I first read the press release, I was confused as to why OMERS will remain majority owner of CBI Health but Don Peat of OMERS clarified it in an email exchange (my bad):

Extendicare purchased CBI Health LP’s (“CBI Health”) home care business, which operates under CBI Home Health LP (“CBI Home Health”). As the release says, OMERS will remain a majority owner of CBI Health, supporting ongoing growth, innovation and excellence in the physiotherapy and rehabilitation services sector.

So there's CBI Health and CBI Home Health.

Makes sense, Extendicare is in the home care business so they carved that out of CBI Home Health from CBI Health's other services.

For its part, Extendicare announced this deal on its website on November 19th, stating it will expand its home health care business by acquiring CBI Home Health for $570 million in cash consideration.

OMERS Private Equity acquired Toronto-based CBI Health Group from private equity firm Callisto Capital LP back in 2011.

At the time, the terms of the acquisition were not disclosed but if you read the press release carefully, this stands out:

CBI Home Health, the company’s home care division, has also experienced remarkable growth, expanding its team from 1,800 employees to 8,500 and delivering over 10 million hours of care annually across seven provinces. 

So, carving out CBI Home Health and selling it to Extendicare for $517 million was a great way to realize value on this deal.

OMERS PE did its job to nurture and help grow the operations at CBI Health which it still owns (the physiotherapy and rehabilitation services sector) and realized great value for its members on this distribution.

This is also a great acquisition for Extenidcare and it will help solidify the company as Canada's leader in the home care business.

Interestingly, shares of Extendicare continue to make and all-time high, rallying on strong fundamentals:

 I agree with analyst Douglas Loe, there's a lot to love about this company. 

Alright, let me wrap it up there. 

Below, learn more about CBI Health and what sets this company apart.

The Globe and Mail published an article from GTA's Top Employers on how UPP is focused on building an intentional culture:

Most veteran employees have clocked decades with their company. For Nirupa Muthurajah, it’s only taken three years to earn that title at the University Pension Plan Ontario (UPP), Canada’s newest defined benefit pension.

When the fund offered her a job in 2022, Muthurajah says it was an easy yes. After a decade in institutional investing at two large Canadian “Maple Eight” pensions and a local family office, she found that UPP’s mission to provide retirement security for university-sector employees resonated with her. Plus, she was getting in on the ground floor.

“What excited me most was the chance to make an impact at the ground level and shape the foundational framework from the very beginning,” said Muthurajah, UPP’s director and equity strategies lead for active public markets.

Part of laying the foundation is building an “intentional” culture, says Omo Akintan, chief people officer. “No organization sets out to be a toxic work environment; they fall into it. UPP realized that you have to define your North Star from a culture perspective and intentionally build programs and develop leaders that can help produce that culture,” she says.

The organization fosters a “learning mindset,” with an up to $5,000 education assistance fund, and is rolling out formalized development plans for each employee. “We encourage dialogue between people and their leaders about what they need to be successful in their roles and where they aspire to take their careers,” Akintan says.

It also sees equity, diversity, inclusion and reconciliation (EDIR) as critical components of its culture. “At UPP, we call out reconciliation intentionally and are being particularly attentive to the Truth and Reconciliation Commission call to action that asks organizations to educate their employees about the rights and history of Indigenous People.”

One way UPP is bringing that to life is through UPP Reads. In 2023, all employees read “21 Things You May Not Know About The Indian Act” by author Bob Joseph and discussed it in peer-facilitated groups. Now, it’s a part of onboarding: once there’s a big enough cohort of new hires, they’re all given a copy and participate in a discussion group afterward.

It has also hosted organization-wide learning around inclusive workplaces and now has an online curriculum of EDIR learning opportunities that employees can choose from on topics such as psychological safety, trans identities, ability rights and other equity-deserving populations.

“This unique education is really supporting us to broaden our perspective and helping us become more aware of marginalized communities and the importance of diversity,” Muthurajah says. “From an investment perspective, it’s valuable for us to be aware of since it’s a priority both in our decision-making and in our hiring practices.”

Muthurajah says she’s benefited from UPP’s support for professional development. Since starting at the pension, focused on active long-only strategies — the active selection of stocks to buy and hold — her role has broadened out to include all equity strategies, including co-managing the pension’s hedge fund portfolio.

She credits the organization for its strong focus on work-life balance. UPP only requires two days per week in-office and offers employees a bank of personal and mental-health days. It even shows up in small gestures, such as a general effort not to ping people after hours or on the weekends, and starting all internal meetings at five minutes past the hour to give people a moment between calls.

“We’re recognizing that people might feel overloaded when a lot of investments are going through, so it’s great to have a recharge day to slow down,” she says. “UPP makes thoughtful effort to support a growing organization, and they’re appreciated as a member of the team.”

I'll give you my quick thoughts but first a little background:

Now in its 20th year, Greater Toronto's Top Employers is an editorial competition that recognizes the employers that lead their industries in offering exceptional places to work. Each year, the project’s editors release detailed reasons for selection explaining why each of the winners is chosen. This provides transparency in the selection of winners and lets readers discover best practices among the region's top employers. Winners are announced annually in a special magazine, distributed online in The Globe and Mail. Any employer, private or public sector, with its head office or principal place of business in Canada may apply to the competition. For more background on this year's competition, read the press release issued on Dec. 2, 2025.    

Alright, now my thoughts and I am going to be honest here even if some people disagree with me (after almost 20 years of blogging on Canada's pensions, I've earned the right to tell it like it is, or like I see it and don't need people's approval).

First, on UPP. It commenced operations in the midst of the pandemic and I truly believe that helped shape the culture there as it wasn't an easy time.

From the get-go, CEO Barb Zvan stressed the importance of respect and she set the tone at the top and it has permeated all the way down the chain of command.

And when I say respect, I mean respect in all its forms, respect for differences of opinion, respect for difference of thought, and respect for all diversity.

Barb has enough experience to know that any organization is only as good as its members and  UPP has done a great job attracting top talent because of Barb, senior staff and the culture they have implemented there.

It doesn't surprise me she was recently named the 2025 CEO of the Year by the Ontario Chamber of Commerce (OCC) as part of its annual Ontario Business Achievement Awards (OBAAs), which celebrate leadership, innovation, and impact across Ontario’s business community. 

To be truthful, however, UPP can't compete with Canada's Maple 8 in terms of compensation because they are too small on a relative basis, so they compete in terms of having the right culture which typically attracts the right employees who value the same things.

Not that UPP's compensation isn't competitive, it definitely is at all levels, it's just not as competitive as much larger organizations but it's still excellent and money isn't everything when employees feel respected and valued and see a clear career path forward.

The biggest mistake some of the bigger pension funds do is remind everyone how well paid they are and then put the pressure on them to perform without creating the right culture to bring out the very best from all their employees.

I can't stress this enough, big compensation with the wrong culture is a formula for organizational failure. I've personally seen it many times at various places I've worked and others have worked.

And building the right culture is really hard, it's a lot more than claiming you follow equity, diversity, inclusion and reconciliation (EDIR) and read about indigenous history and other marginalized groups, it's about confronting your own personal biases and really taking a critical look at your organization and seeing who is in charge and whether they have the right leadership skills including empathy to build the right culture in their department. 

I can't stress this enough, too many organizations fall into the trap of window dressing, bean counting, we have this many women at this level, this many from this minority group or that minority group, but do we really have the right leaders in place in all departments and how do we measure their success at building the right culture? 

Admittedly, it's not easy, it involves asking employees at all levels to evaluate their bosses and give truthful feedback, good and bad. 

Moreover, I'll be the first to say in this hyper-sensitive, hyper-woke world, it's easy to get lost in the weeds and feel overwhelmed if you are managing a diverse team and need to strike the right balance to get the most out of your employees.

Communication, empathy and honesty are critical leadership skills and that involves being honest with yourself and your own biases.

In terms of honestly, I cannot stress enough the most marginalized group in Canada's labour force remains people with disabilities and not much is being done at public or private organizations to address this in a meaningful way.

Ask yourself when is the last time you saw someone in a wheelchair at your organization, a blind or deaf person, a schizophrenic or someone with a chronic disease struggling to make ends meet?

These are uncomfortable questions but the test of a fair and equal society is how it treats it's most vulnerable citizens: children, elderly and people with physical and mental disabilities.

I once had a CEO of a major Canadian pension fund ask me how to attract more people with disabilities. 

I asked him straight out: what are you guys doing to attract them, is your organization ready to assume this responsibility? He admitted me to me  that he honestly doesn't know but it nagged at him and wanted to do something about it (he never did as far as I can tell but at least he was concerned).

Alright, let me wrap it up there, just remember culture is like governance, it takes a lot of work and constantly needs to be evaluated and improved every year. And that takes a lot of work, hard work.

Below, a well-known older clip where Simon Sinek explores empathy and perspective in leadership. If you've never seen it, take the time to watch it, he offers great perspective to all leaders.