Alternatives boost CPPIB performance

The Canadian pension’s private equity, real estate and infrastructure holdings tempered losses from equities in the first fiscal quarter of 2011.

The Canadian Pension Plan’s assets rose slightly in the first fiscal quarter of 2011, bumping up to C$129.7 billion (€95.4 billion; $125.5 billion) from C$127.6 billion, partly because of increasing performance in private equity, real estate and infrastructure asset classes.

“This was … a quarter where the CPP fund benefitted from diversification into private equity, real estate and infrastructure and private debt holdings,” said David Denison, president and chief executive officer of the Canadian Pension Plan Investment Board, in a statement. CPPIB manages the fund.

It only discloses specific performance for private equity, real estate and infrastructure portfolios once annually, at the end of the fiscal year on 31 March, a CPPIB spokesperson said.

CPP’s private equity portfolio is valued at about C$17 billion, or about 13.1 percent of the fund. It makes both direct and fund investments.

The pension’s real estate portfolio is valued at C$7.9 billion, or 6.1 percent of the fund, and its infrastructure holdings are valued at C$6.1 billion, or 4.7 percent of the fund.

CPP’s gains during the quarter came mostly from contributions, which totaled C$3.8 billion in the first quarter. The gains were offset by losses in public market holdings, which dragged down the investment return by 1.3 percent, or negative C$1.7 billion, the pension said.

For the five-year period ended 30 June, 2010, the CPP fund had generated annualised investment rate of return of 3 percent, or C$13.8 billion of investment income, the pension said.

CPPIB has kept busy investing this year. Most recently, the pension teamed up with Onex Corp on a £2.9 billion offer to de-list UK engineering company Tomkins.