Two of Canada’s largest pension funds have held preliminary discussions with Fairfax Financial Holdings Ltd. about its bid for BlackBerry Ltd., yet are holding off from the effort because they only want pieces of the smartphone maker, two people familiar with the talks said.

The Ontario Teachers’ Pension Plan and the Alberta Investment Management Corp., which together manage about C$198 billion ($192 billion), are targeting BlackBerry’s secure server network and other business units, the people said. The funds negotiating with Fairfax aren’t interested in backing a bid for the whole company and haven’t joined the bidding consortium yet, said the people, who asked not to be identified because the talks are private.

Fairfax, the largest shareholder of BlackBerry, announced Sept. 23 it was leading a group of investors planning a buyout of the money-losing smartphone maker. Fairfax Chief Executive Officer Prem Watsa declined to name the investors in the group, saying it had a strong Canadian component.

That points to Canadian pension funds such as Ontario Teachers’ and AIMCo, as the Edmonton, Alberta-based fund is known, said Kevin Stadtler, president of Stadtler Capital Management LLC in Texas. Other funds including Canada Pension Plan Investment Board, the largest pension manager with C$188.9 billion under administration, and Caisse de Depot et Placement du Quebec, the second-largest, have said in the past six weeks that they would look at BlackBerry.

Finance Risk

“There is a fairly big financing risk if the Canadian pension funds are not involved,” said Greg Taylor, a portfolio manager at Aurion Capital Management in Toronto that has about C$7 billion in assets and doesn’t own BlackBerry. “The problem is the core business has eroded so quickly that it’s hard to make a case this is a good stable business that would fit their liabilities.”

Deborah Allan, spokeswoman for Ontario Teachers’, declined to comment as did Denes Nemeth, spokesman for AIMCo, Linda Sims at Canada Pension, Jean-Benoit Houde at Caisse de Depot, and Lisette Kwong at BlackBerry.

BlackBerry fell for a second day on concern that Watsa may fail to win support for his $9 a share cash bid. Fairfax has agreed to put up its 10 percent stake in BlackBerry for the offer, and needs to find equity and debt investors for the rest. BlackBerry fell 6.2 percent in New York to $8.01, an 11-month low, cutting its market value to $4.2 billion.

“As more details, or lack thereof, emerge about the Fairfax takeover deal, the chances of the deal going through appear grimmer,” Sanford C. Bernstein Ltd. analyst Pierre Ferragu wrote in a research note today. Bernstein rates BlackBerry “underperform.”

Vested Interest

BlackBerry holds long-term value, particularly as it moves away from lower-margin consumer handsets to a focus on corporate customers, which offer higher margins, Paul Rivett, president of Fairfax, said in a Sept. 23 phone interview.

There is “tremendous pressure on BlackBerry from those with a vested interest in destroying the company,” Rivett said in an e-mail today. “We work well under pressure.”

Fairfax is comfortable with the group it’s currently working with and will reveal its partners after due diligence is completed, Rivett said.

Asset Values

BlackBerry’s assets are probably worth about $2.8 billion excluding its cash reserves of $2.6 billion, said Steven Li, an analyst at Raymond James Ltd. in Toronto in a note to clients. That includes patents worth about $1.6 billion, its network of secure servers that may fetch $825 million and licenses worth about $400 million, said Li.

The network of secure servers, which BlackBerry operates on behalf of its business clients, are sought after because they offer a level of security for e-mail transmissions that other devices can’t provide. U.S. government agencies remain a customer of BlackBerry for that reason.

BlackBerry’s patent portfolio includes trademarks on smartphone designs and engineering as well as a share of 6,000 patents BlackBerry acquired, as part of a consortium, for $4.5 billion from bankrupt Nortel Networks Corp. in 2011.

While revenue the Waterloo, Ontario-based device maker gets from subscriber services fees reached $794 million in the fiscal first quarter, that’s come under pressure from carriers no longer willing to pass those charges on to their subscribers. As of June, the company had 72 million subscribers, down from 76 million in the previous three months.

Three Companies

“I think that’s probably the only way it will work – if they try to team up to buy part of the portfolio,” Taylor said in a phone interview Wednesday. “No one wants to run the hardware business.”

Watsa, who models his investment style after billionaire investor Warren Buffett, said the group is still seeking financing for the offer, which will be subject to due diligence and further negotiation.

“It would be best if it were three companies: intellectual property, BlackBerry messenger and the services business,” Stadtler said in a phone interview yesterday from Fort Worth, Texas. “To maximize the value for the pension funds, you make those three different businesses.”

Of the Canadian pension managers, Toronto-based Ontario Teachers’ held the most BlackBerry stock, with 1.97 million shares at June 30 worth C$17.3 million yesterday, according to data compiled by Bloomberg. Ontario Teachers’ is Canada’s third- largest pension fund; Alberta Investment ranks fifth by assets.

Past Investments

Ontario Teachers’ has made technology investments in the past. In June 2012, it was part of a group with BCE Inc., the country’s largest telecommunications operator, to acquire data- center operator Q9 Networks Inc. for C$1.1 billion. Canada Pension has also invested in technology companies, including more than tripling a $300 million investment in Skype Technologies SA in two years before selling the stake in 2011 to Microsoft Corp. The Toronto-based fund manager had invested in Skype with private-equity firms including Silver Lake Management LLC.

“There is an element of nationalism and pride, but at the end of the day it’s not really material,” said Stadtler, who doesn’t own BlackBerry shares. “What’s material is: Are they buying an asset at a low price that would benefit their constituents that they manage money for? They do things to make money, and that’s their only focus.”