The Canada Pension Plan Investment Board has named Mark Wiseman, a seasoned deal maker with a keen interest in Asia, its next leader, as it seeks to boost its foreign investments.
The government-backed public pension plan is looking for higher returns from the shift in investment opportunities it expects to see as China takes over as the world's dominant economy. The future retirement incomes of millions of young Canadians hinge on CPPIB's ability to craft a successful long-term investment strategy.
Chief executive officer David Denison, who turns 60 this year, will retire next summer after seven years at the helm of an organization that has seen massive growth and has been transformed from a staid Crown corporation to a global investment powerhouse.
When Mr. Denison took over, CPPIB was in its infancy, having made its first investment in 1999, two years after its creation as an arm's-length Crown corporation. It had 70 employees tasked by Ottawa with achieving solid investment returns without taking too much risk to support the retirement of millions of people who contribute to the Canada Pension Plan.
Now, CPPIB has nearly 800 employees, including an increasingly impressive roster of investment professionals who can scour the globe for opportunities and help the fund do its own deals.
The $152.8-billion fund, invested on behalf of 18 million Canadians, is one of the biggest equity traders in Canada and is gaining a reputation as one of the most powerful private equity and real estate investors in the world.
Mr. Wiseman, 41, was Mr. Denison's first hire and quickly became his right-hand man. Mr. Denison lured him from the Ontario Teachers' Pension Plan by offering him the chance to help mould an organization that would become a key part of Canada's retirement savings infrastructure.
"There's a unique aspect to the challenge of having an organization that is truly that young and small, and being able to define a vision for it and then work to accomplish that," Mr. Denison said in an interview Tuesday. "You don't get the opportunity to do this that many times in life."
Mr. Wiseman recently helped to recruit Mark Machin, who had been the head of Goldman Sachs' investment banking business in Asia, as the first president of CPPIB's burgeoning Asian operations.
That region represents Mr. Wiseman's biggest challenge, and it's one he relishes. CPPIB opened an office in Hong Kong four years ago and, as the plan's current head of investments, Mr. Wiseman has travelled to Asia many times, building an impressive roster of connections with power brokers from China to Singapore. He has also helped CPPIB invest $4-billion in the region since 2007.
Mr. Wiseman, who often sports Asian cufflinks to mark the region's importance, has long believed that China will become the world's largest economy. To take advantage of that, he wants CPPIB to ramp up its exposure to the country now.
"We have to keep in mind not where the world is today but where the world is going," he said recently. "China will be the largest economy in the world … and as investors with a 75-year time horizon, we have to be ahead of the curve."
As head of investments, Mr. Wiseman has already garnered a reputation for astute deals. Just this month, the fund announced its largest real estate investment, with the contribution of $1.8-billion (U.S.) to a joint venture that will own 10 regional malls and two redevelopment sites in the United States.
CPPIB has also been participating in many of the world's biggest private equity transactions, from the $6.2-billion takeover of Kinetic Concepts Inc. to the acquisitions of IMS Health Inc. and Tomkins PLC.
Mr. Wiseman has overseen some highly profitable deals, such as CPPIB's successful gamble on Skype. He will take over as the pension fund's CEO at a time when good returns are harder to come by. "It's a tough time for pension plans and for investors generally," he said in an interview Tuesday.
Low interest rates are hurting fixed-income returns and adding to pension plans' liabilities. Stock markets are volatile, and the outlook for the global economy is precarious.
But as a relatively young organization that has many years before its investment returns will be required for pension payments, CPPIB is in a better position than most Canadian plans, Mr. Wiseman said. "The challenges for us are less acute than they are for a traditional pension plan."
Mr. Wiseman lives in Toronto with his two young sons and his wife Marcia Moffat, a lawyer and former investment banker who works in the Royal Bank of Canada's mortgage business.
Mr. Denison, who is the chair of the Canadian Coalition for Good Governance, said he is looking forward to joining corporate boards, which he was not allowed to do in his current role.
"A lot of boards have age limits of 70 years for retirement; to allow for a meaningful period of time to serve on a board, you can't leave it too long," Mr. Denison said, explaining his rationale for stepping down now.
Another element, he said, was Mr. Wiseman: "He's someone who is ready. He doesn't need any more seasoning or time to develop into a CEO."