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John Graham, the CEO of the Canada Pension Plan Investment Board, in Toronto on March 22, 2021.

Fred Lum/The Globe and Mail

On Friday nights, you’ll find John Graham and his wife playing pickleball near their home in Oakville.

The newly named chief executive at one of the world’s largest asset managers, the $476-billion Canada Pension Plan Investment Board, took up the outdoor game - a hybrid of badminton and Ping-Pong - during the pandemic to stay nimble. In his first interview since becoming CEO, the 49-year-old opened up on his plans for a fund responsible for 20 million Canadians’ retirement savings. It’s clear the new boss will push an 1,800-employee organization to be as light on its feet as he aspires to be on a pickleball court.

The CPPIB handed Mr. Graham the top job unexpectedly in late February. His predecessor, Mark Machin, resigned when the fund manager learned he received a COVID-19 vaccination early last month in the United Arab Emirates. Mr. Graham smiled when asked how his strategy for the CPPIB will differ from that of Mr. Machin, who ran the business for the past five years.

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“I’ve always believed the saying that ‘strategy takes a back seat to execution.’ It’s all about execution,” Mr. Graham said, adding that he was part of the executive team that set strategy with Mr. Machin. The Ottawa native and former competitive squash player then told a story about how the CPPIB invested during the early days of the pandemic last spring, to highlight the nimble culture he wants to nurture.

First, a bit of background. The CPPIB is a relatively young Crown corporation - it was founded in 1997 - that has grown incredibly quickly. In just more than two decades, the organization evolved from a passive investor, buying stock and bond index funds, into an active global money manager, with nine offices in eight countries. The CPPIB now has deep expertise in numerous sectors, including private credit investments, where Mr. Graham built a 125-person team running a $42-billion portfolio prior to becoming CEO.

For leaders like Mr. Graham, the challenge with managing rapid growth is breaking down silos between divisions, to ensure employees share information and capital goes where it can earn the best return. Which brings us to how the CPPIB played the markets last March and April, as lenders came to grips with COVID-19.

In the early days of the pandemic, global credit markets froze. The CPPIB had money earmarked for sectors such as private credit - Mr. Graham’s group - but nowhere to put that money to work. However, the team investing in public debt markets began pounding the table for what they saw as compelling opportunities to buy high-grade, triple-A rated credit securities at 70 cents on the dollar, a steep discount to their historic values.

The CPPIB quickly shifted billions of dollars into these fixed income investments, pulling capital out of other asset classes. Mr. Graham said the fund made handsome returns in the weeks that followed, as credit markets bounced back and triple-A rated securities again traded near 100 cents on the dollar.

John Graham, the CEO of the Canada Pension Plan Investment Board, is photographed during an interview in Toronto on March 22, 2021.

Fred Lum/The Globe and Mail

“We have the resources and the capability to be the best in the world, where we decide to be the best,” he said. “The nuance in that approach is to be the best, we all have to think and act as one fund, as one team that works together.”

Looking ahead, Mr. Graham said the CPPIB will need to be flexible as it commits to new investments, to avoid missteps at a time when public equity market valuations ”are pretty rich and some geographies are pretty rich.” The CEO currently sees opportunities in sectors such as venture capital - where its San Francisco-based team invests alongside established VC funds - and in countries such as India.

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The CPPIB overlays environmental, social and governance (ESG) criteria when it puts money to work, an approach honed over more than a decade. Mr. Graham said investing with ESG themes is opening the CPPIB up to promising new sectors, including investments in battery storage and businesses that develop new, lightweight materials for aircraft and cars.

The Toronto-based fund manager’s ESG expertise could help the the CPPIB win roles in the wave of infrastructure projects expected under U.S. President Joe Biden. “As an active global investor in infrastructure, we are keenly watching the broad spectrum of opportunities that arise in the U.S.,” he said.

Under its new leader, the CPPIB will also continue to invest in energy projects, including Alberta oil and gas businesses, and attempt to profit as these companies shift towards sustainable business models. “We think energy transition, including the shift to renewables, will be one of the biggest investment opportunities over the next 10 years,” Mr. Graham said. “We don’t believe in a blanket divestment approach. We’re active investors, and an approach of engagement will have more impact.”

Mr. Graham has been working from home for the past year - he did an interview across a colleague’s backyard picnic table - and says he is proud of CPPIB employees’ productivity during the pandemic. However, the new boss said he is looking forward to getting back to work in an office. He also said the CPPIB will continue to invest in high quality real estate, including office buildings. The fund manager currently invests 11 per cent of its portfolio in properties.

“Managing a remote work force presents challenges. It requires a formal, scheduled way of working, as opposed to the office,” Mr. Graham said. “I’ve always managed in part by walking around.” And lately, he’s been blowing off steam at the end of the week with a game of pickleball.

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