Canada Pension Plan Investment Board posted a 2.3-per-cent return in the quarter ended Sept. 30, helping it maintain double-digit long-term returns and add nearly $10-billion to its total assets.
CPPIB, the investment manager for the Canada Pension Plan, said its five-year and 10-year returns through Sept. 30 averaged 10.3 and 10.2 per cent over the period, and it closed the quarter with assets of $409.5-billion.
CPPIB didn’t break out returns by asset class, but said the group that actively manages its equity investments, as well as its private-equities division, were “strong contributors.” The Active Equities department picks specific stocks with an aim to outperforming the market, while private equity is the ownership of private companies, often aided by substantial borrowing.
It received “modest gains” from its passive portfolio, a style of investing designed to match the overall market. CPPIB also said it had positive performance in other asset classes, including its bonds, aided by declining interest rates.
A little less than one-third of the fund’s assets are in stocks traded on the public markets. A quarter of the portfolio is private equity.
All return percentages are net of costs, CPPIB said. Because the CPP must serve plan members for decades to come, CPPIB says long-term results “are a more appropriate measure of CPPIB’s investment performance compared to quarterly or annual cycles.”
Canada Pension Plan, founded in 1966, is the primary retirement-security program for working Canadians. The government created CPPIB in 1999 to professionally manage the Plan’s money. The past two decades have seen a shift first from bonds to stocks, then to assets like real estate, infrastructure and private equity. The government projects the CPP Fund will grow to $545-billion in assets by 2025 and $1.5-trillion in assets by 2040.
Major deals in the quarter included buying publicly traded Pattern Energy Group Inc. for US$2.3-billion in cash, valuing the company at US$6.1-billion, including debt. It also struck a deal to merge data-information provider Refinitiv into the London Stock Exchange, valuing Refinitiv at US$27-billion.
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