The new head of Canada Pension Plan Investment Board’s Asian operations is stepping into the role at a time when many investors are becoming a little less bullish about China. So it might just be the perfect time for him to do some deals, suggests Mark Wiseman, CPPIB’s executive vice president of investments.
“Other peoples’ pessimism may very well create additional opportunity for a long-term investor like us,” says Mr. Wiseman. “The path to Chinese growth, and therefore the whole region’s growth, won’t be a straight line. It will be up and down with an overall trend for growth. And, as a long-term investor, we have the luxury of not having to time the specific point in a cycle.”
Mr. Wiseman was speaking from Hong Kong, where he was announcing the appointment of Mark Machin as the first president of CPPIB’s Asian operations. The pension fund opened an office there four years ago. Mr. Machin comes from Goldman Sachs, where he worked for 20 years in London, Hong Kong, and Beijing, eventually leading Goldman’s investment banking business in Asia. With his hire, the Canadian pension plan’s Asian operations – which account for $13.1-billion, or less than 10 per cent of the fund’s assets – are entering a new phase, one that will see more active investment.
To date, CPPIB’s Asian investments have focused on real estate and private equity, with the fund deploying $4-billion in the region over the last four years. “We’ve just put, in the last few months, our first public markets investment professionals on the ground here, to help analyze the public markets and to help analyze external managers operating in these markets, and we’re starting to consider private debt opportunities in the region,” Mr. Wiseman says. “So over time, obviously we’ll need help in doing this, we’ll expand both the scope and scale of activities that we’re turning out here.”
Mr. Wiseman has long been bullish on Asia’s prospects, and he still wants to see CPPIB bolster the proportion of its investments that are there.
“We just have to continue to think as an organization about being global, not just being a Canadian organization that invests abroad, but having a truly global perspective,” he says. “We have to keep in mind not where the world is today but where the world is going. China will be the largest economy in the world. I’m not sure what path it will take to get there – I’m not sure if that’s in 10, 20, or 30 years – but that will be the case, and as investors with a 75-year time horizon, we have to be ahead of the curve…
“We’ll take our time, but we have to get to a point where our investment portfolio better reflects where global GDP is.”
CPPIB invests on behalf of 18 million contributors and beneficiaries to the Canada Pension Plan. Mr. Wiseman says the fund has come a long way in recent years.
“If you had asked me four years ago when we opened our office here if we’d ever be able to attract someone with Mark’s track record and reputation, I would have thought it impossible,” he says. “But I think our reputation is strong as a global investor, an investor that’s long-term in nature, that’s well-capitalized, and professionally managed.”
