CPPIB PE portfolio grows faster than public equities

The Canada Pension Plan Investment Board’s private equity investments increased four times more than its public investments.

The Canada Pension Plan Investment Board's (CPPIB) private equity portfolio increased by 18.2 percent from 2014 to 2015, outstripping the growth of public investments by four times. Its investments in listed equities grew by 4.89 percent.

CPPIB's private equity investments totaled C$ 58.2 billion ($ 44.4 billion, €39.8 billion) at the end of 2015, compared to its public markets total of C$87.9 billion.

The Toronto-based pension fund's fiscal earnings for the year ending 31 March 2016 released last week showed net assets of C$278.9 billion up from last year's C$264.6 billion. 

“Over the past twelve months, despite one of the more challenging investment environments in recent years and predominately negative equity markets, the CPP Fund generated a moderate gain… This year's results highlight the real-time impact of short-term market volatility, reinforcing why we focus on long-term results,” CPPIB president and chief executive officer Mark Wiseman said in a statement

In particular, the CBBIP saw a stark contrast between the significant upswing in the final quarter of fiscal 2016 compared to the broad declines in the same quarter the year before. 

A number of factors contributed to CPPIB's recent fiscal results, including an overall gain from the portfolio's private equity assets, real estate and fixed income holdings. The number of complex global transaction also contributed to the pension fund's positive results, according to the statement.

“This year, each of our investment programs fired on all cylinders, contributing positive returns to the fund. We continued to see the benefits of a broadly diversified portfolio across geographies and asset classes, and our private assets served as a safe harbour from the rough seas of the public markets,” added Wiseman

Wisemen will be leaving CPPIB for a senior managing director position at Blackrock , heading up the firm's fund's global active equity business in early September, as reported by Private Equity International. Mark Machin, who currently is a senior managing director and head of international at the CPPIB, will assume Wisemen's role in June. 

In 2015, CPPIB completed the acquisition of Skyway Concession, which operates and maintains a toll highway road in Chicago, with Ontario Municipal Employees Retirement System and Ontario Teachers' Pension Plan for a total of C$3.8 billion. CPPIB fund also jointly acquired Petco with CVC Capital Partners for a total of approximately C$6 billion, among other transactions. Last October, the pension fund opened their Mumbai office.