CPP Investments Consolidates Wind Energy Investments

The Canada Pension Plan Investment Board, which manages C$ 1 billion ($730 million) in offshore wind assets, primarily through its portfolio company Reventus Power, this week announced an expansion of the company to manage the pension fund’s global wind power investments.

CPP established Reventus in 2021 to manage wind investments for the pension fund.

Reventus, which also announced the appointment of a new CEO, will double its staff and increase its presence in global markets, including the U.K., Germany, Poland and Portugal.

“As the dedicated platform for CPP Investments’ offshore wind investments, Reventus Power has a tremendous opportunity to become a truly global force in offshore wind,” said Mark Hanafin, chair at Reventus Power, in a press release. “Already active in core markets outside of Europe, the team now has the scale and market-positioning to pursue some of the sector’s most exciting growth opportunities in Europe, North America and Asia Pacific.”

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

CPP Investments managed C$ 590.8 billion in assets ($431.74 billion) as of December 31, 2023, for 22 million beneficiaries. Of these assets, C$135 billion is allocated to real assets, of which 11% is allocated to energy and resources, and 10% to power generation.

The sustainable energies group within CPP Investments, of which Reventus Power is a part, manages C$32.0 billion in assets. Other portfolio companies within the group include Aera Energy, Auren Energym Cordelio, Octopus Energy, Pattern Energy, PowerX, Redaptive, ReNEW, and Renewable Power Capital.

Development projects from Reventus include a 1.5 GW offshore wind farm in the Celtic Sea, in partnership with EDT Renewables UK and energy development firm ESB Group.

CDPQ to Invest $1 Billion into Wind and Solar Firm Invenergy

Canada’s CPPIB Returns 1.3% in Fiscal 2023

Tags: Canada, Canada Pension Plan Investment Board, CPP, CPP Investments, CPPIB, Pensions, Reventus Power

Despite double-digit gains that raised the fund’s value to nearly $3 billion, the returns fell just short of the pension benchmark’s performance.

The Policemen’s Annuity and Benefit Fund of Chicago’s 11.8% return in 2023, raising the pension fund’s asset value to just under $3 billion. However, it fell just short of its benchmark’s 12.1% return.

The double-digit investment gain was led by the pension fund’s equity assets, which accounted for the portfolio’ largest allocation at more than 55% and were the top-performing asset class for the year ended Dec. 31. Despite an 18.89% return, the fund’s equities underperformed its benchmark by more than 300 basis points.

The pension fund’s top equity holdings include tech giants Apple and Microsoft at 2.9% each, followed by Amazon and NVIDIA at 1.6% and 1.2%, respectively, and Google parent company Alphabet at 1.0%. Semiconductor stocks were the top equity performers for the year as Mediatek and Intel returned 45.2% and 41.8%, respectively, for the fund, followed by Broadcom, which earned 35%. The fund’s holdings in Mexican bank Grupo Financiero Banorte and Samsung returned 27.5% and 20.2% respectively, while its stock in Amazon and Microsoft were up 19.5% and 19.3%, respectively.

The fund’s opportunistic credit portfolio returned 15.80%, beating its benchmark’s return of 12.34%, followed by fixed-income assets, which earned 7.22% and topped its benchmark’s 5.53% return.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Total infrastructure assets had the greatest outperformance for the fund, returning 6.28% for the year, while its benchmark lost more than 8% during the same period. Hedge fund assets grew 4.84% for the year, which was 150 basis points short of its benchmark, while private debt – which had the largest underperformance – returned 3.10%, compared with its benchmark’s return of 8.20%. The pension fund’s real estate assets lost 2.41% for the year but outperformed its benchmark by nearly six percentage points.

As of the end of 2023, the pension fund’s asset allocation was 34.9% U.S. equity, 18% fixed income, 16.8% non-U.S. equity, 6.5% real estate, 5.2% hedge funds, 4.6% private equity, 3.8% infrastructure, 3.4% long/short equity, 3.3% opportunistic credit, 2.2% private debt, and 1.3% cash.

The pension fund reported three- and five-year annualized returns of 4.3% and 8.3%, respectively, compared with its benchmark’s returns of 4.4% and 8.0% over the same periods. It also registered annualized returns of 7.4% over seven years, equaling its benchmark, and a 10-year return of 6.4%, which just beat its benchmark’s 6.3% return.

Over the longer term, the fund reported a 15-year annualized return of 8.3%, ahead of its benchmark’s 7.8% return, and an 8.3% annualized return over the 40 years since its inception in 1984.