Skip to main content
A scary good deal on trusted journalism
Get full digital access to globeandmail.com
$0.99
per week for 24 weeks SAVE OVER $140
OFFER ENDS OCTOBER 31
A scary good deal on trusted journalism
$0.99
per week
for 24 weeks
SAVE OVER $140
OFFER ENDS OCTOBER 31
// //

The Crystal Serenity is the biggest cruise ship to plan a transit of the legendary Northwest Passage.

Canada Pension Plan Investment Board is investing in a river and ocean cruise company, marking the pension fund's first private investment based on its thematic investing strategy.

CPPIB said Monday that it would team up with alternative asset manager TPG Capital to jointly invest $500-million (U.S.) in Viking Cruises, which operates more than 60 vessels in dozens of countries and has plans to expand.

The deal had to meet all of the criteria that would usually be applied to a private equity deal at CPPIB, but the transaction is unique in that it also had to be related to one of the long-term macroeconomic trends the pension fund has identified as likely to affect its future investments. It is the first of many private market deals for the thematic investment team, which was formed in 2014 and is expected to grow to be a multibillion-dollar asset management group.

Story continues below advertisement

In the case of Viking Cruises, the initial theme was evolving demographics, said Pierre Lavallée, global head of investment partnerships at CPPIB, who oversees the thematic group. In many parts of the world the baby boomer generation is aging, pushing up the median age in developed countries such as Canada and the U.S.

CPPIB then thought about the increased number of retirees and their inclination to travel as part of its investment into Viking Cruises, which designs trips for passengers with interests in geography, culture and history. Viking Cruises was founded in 1997 and works with travellers across North America, Britain, Australia and China.

Many members of the boomer generation also have robust disposable incomes, exhibiting "big spender behaviour," Mr. Lavallée said.

In thematic investing, CPPIB asks "are there ways we can invest behind that structural change in a way we think our investment will be favoured by the evolution of the demographic change?" Mr. Lavallée said. "Then you still need to make sure the company is a good company, that management is strong, that the strategy is solid and that we'll get a good return for our investment on a risk-adjusted basis."

The thematic investing team's other significant focus is on the trend of "innovative disruption," or the impact of technological change on industries that creates investment opportunities.

Mr. Lavallée said the thematic investments team passed on several private deals before settling on Viking Cruises. The group initially made only public market investments, through Mr. Lavallée will not disclose the companies CPPIB has taken stakes in. More than $1-billion has been invested since the group's inception.

"This is a program we think could have several billion dollars invested in the next several years," Mr. Lavallée said.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies