CPPIB's private equity portfolio soars 40%

Year end results show the Canada Pension Plan’s private equity portfolio increased in value from C$16.1bn to C$22.7bn, helping the pension’s total assets reach a record C$148.2bn.

The Canada Pension Plan Investment Board’s (CPPIB) saw the return for its private equity portfolio increase by 40 percent over its last fiscal year.

CPPIB president and chief executive officer David Denison pointed to “strong results across all asset categories and geographies,” as he highlighted the fund’s “excellent performance”.

The overall value of the state Canada Pension Plan grew to C$148.2 billion (€103.4 billion; $152.8 billion) from $127.6 billion in 2010, CPPIB said as it announced its fiscal year end performance to 31 March.

The C$20.6 billion valuation increase, to the highest valuation in its history, resulted from a number of acquisitions, C15.5 billion in investment income and C$5.4 billion in net CPP contributions. The value of its private equity portfolio increased from C$16.1 billion to C$22.7 billion, or from 12.5 percent of total assets to 15.3 percent.

Private foreign developed market equities saw the largest increase in performance year-on-year for the pension, surging from -9.4 percent to 19.4 percent. Private emerging market equities also went from positive to negative, starting the fiscal year at -4.3 percent and reaching 17.1 percent by 31 March. Canadian private equities increased from 13.1 percent to 16.9 percent on the year.

Among CPPIB’s private equity investment highlights was its partnership with Toronto-headquartered Onex Partners, the large-cap private equity arm within publicly listed Onex Corporation, acquiring UK engineering company Tomkins for $4.7 billion – the largest buyout of 2010.

The investment in Tomkins marked the second consecutive year that CPPIB co-invested in a record-setting global private equity transaction. In 2009, it partnered with TPG Capital on the $5.2 billion buyout of IMS Health.