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The investment arm of the Canada Pension Plan is restructuring its largest group by assets, according to internal memos, marking the fund manager’s first substantial changes under newly appointed chief executive officer John Graham.

The Canada Pension Plan Investment Board is also revising its senior ranks, with at least three managing directors departing.

Total Fund Management is CPPIB’s largest group by assets and oversees macro portfolio strategy for the fund manager’s public markets division. The group is overseen by chief investment officer Ed Cass and was created last fall by merging Total Portfolio Management, which had $180-billion under management, with the fund’s Balancing and Collateral team.

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Under the new restructuring, the memos say, the group will have five subdivisions, including portfolio design and active investment management. Total Fund Management will also revise its staffing level, which is likely to affect about 25 per cent of its employees, or about 30 people. The changes will include departures and internal transfers.

CPPIB is also making changes at the managing director level and has internally announced the departures of Kevin Bespolka, who oversaw the macro strategies group within its public markets arm, and Nick McKee, who was head of financial institutions for direct private equity.

Earlier this week, CPPIB also announced that it is forming a sustainable energy group that spans renewables and conventional energy and will have $18-billion in assets. As part of the merger, managing director Avik Dey, who was head of energy and resources, will leave the fund.

The changes come a little more than one month into Mr. Graham’s tenure. He took over in late February from Mark Machin, who resigned when the fund manager learned he received a COVID-19 vaccination in early February in the United Arab Emirates.

In an e-mail, CPPIB senior managing director Michel Leduc wrote that while the changes were made shortly after the new CEO’s appointment, Mr. Graham had been leading an enterprise-wide assessment of the fund’s structure in recent years, and worked with other executives in doing so.

As part of this, CPPIB appointed Mr. Cass as its first chief investment officer last fall, making him responsible for decisions such as capital allocation between investment programs and balance sheet management. CPPIB has been preparing for its coming growth as a result of federal changes that will mean 20 million Canadians contribute more money to CPP annually.

Mr. Graham previously ran private credit investments, which is a 125-person team that manages $42-billion. CPPIB is Canada’s largest pension fund manager, with $476-billion in assets.

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With reports from David Milstead and Andrew Willis

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