CPPIB Names Jon Webster COO | Chief Investment Officer

The Canada Pension Plan Investment Board has named Jon Webster senior managing director and chief operating officer, it announced on Tuesday. Webster will oversee the C$536 billion (US$396 billion) pension fund’s technology, data, investment operations, security and corporate services functions.

Webster will join CPP Investments from Boston Consulting Group, where he was a managing director and partner, as well as a member of its financial institutions and technology advantage practices. Webster specializes in digital and technology-enabled transformations and advises senior executives in retail banking, commercial banking and insurance.

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Prior to BCG, Webster was chief information officer for digital and transformation at Lloyds Banking Group in the U.K., as well as chief operating officer for the bank’s digital division.Before joining Lloyds, Webster worked at KPMG for more than seven years, starting as a director before being promoted to partner. He earned a B.S. in industrial mathematics and a Ph.D. in mathematics from Loughborough University in the U.K.

The pension fund also promoted Maximilian Biagosch to senior managing director and global head of real assets. He will remain head of Europe and a member of the CPPIB’s senior management team. Biagosch joined CPP Investments in 2015 as managing director and global head of portfolio value creation, and he was promoted in 2021 to managing director and global head of direct private equity.

Before joining CPPIB, Biagosch was head of the financing group at Permira Advisers in London for more than seven years, and prior to that he was a director at BNP Paribas. Before BNP, Biagosch was a vice president at Deutsche Bank Securities.

“These appointments position us well to continue building long-term value for the CPP fund,” CPPIB President and CEO John Graham said in a release. “Jon’s successful track record in operations and technology-enabled transformation with financial organizations makes him ideally suited to both take on the role of COO and contribute important insights to the organization.”

Graham added that “we have valued Max’s experience, strong leadership and demonstrated performance on CPP Investments’ senior management team—all attributes that position him well to lead our global real assets program.”

During its fiscal third quarter of 2023, its most recently reported quarter, CPPIB reported several major investments within its real assets portfolio, including a $200 million investment in Redaptive, a U.S.-based energy-as-a-service provider, and it acquired an approximately 9.5% state in Brazilian fiber-to-the-home network provider V.Tal for C$639 million. It also agreed with Royal Schiphol Group to acquire a stake of 1.59% in international airport operator Aéroports de Paris.

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Tags: Canada, Canada Pension Plan Investment Board, chief operating officer, CPPIB, Jon Webster, Maximilian Biagosch, Pension Funds, Real Assets, senior managing director

Sustainability report highlights progress on topics including funding; the path to net zero; sustainable operations; and diversity, equity and inclusion.

CalSTRS, the largest educator-only pension fund in the world, with $311.5 billion in assets, released its’ ninth annual sustainability report for fiscal year 21-22.

The system’s defined benefit program was 73% funded as of the end of fiscal year 2022, on June 30, 2022, and on schedule to reach full funding by 2046, under current actuarial assumptions. When the funding plan was adopted in 2014, it was projected at the time that the funded status would be 66.6% on June 30, 2022, due to a lower interest rate assumptions and the unforeseen strong performance of equities and financial assets from 2014 to present. According to the report released in the beginning of February, “the funding goal reflects a shared commitment to ensure the long-term sustainability of the Teachers’ Retirement Fund by state politic bodies, current teachers, and residents of the state of California.”

The nature of the CalSTRS population adds a challenge to achieving actuarial full funding, as that most of the of plan participants are female and live longer than the average individual in the United States. The oldest CalSTRS participant was 109 years old in 2022, according to the report.

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Adding more significance to CalSTRS’ funding level is the fact that CalSTRS members do not pay into Social Security and therefore do not receive a Social Security benefit for CalSTRS-covered employment. In addition, that the report said members who retired in fiscal year 2021–22 received, on average, benefits matching 54% of their highest salary.

Environmental Impacts

In September 2021, the Teachers’ Retirement Board committed CalSTRS to achieving a net zero portfolio by 2050 or sooner, in response to climate change, in order to “preserve a livable planet and enhancing the long-term value of the pension’s investments.”

“Our long-standing focus on sustainability and resiliency served us well last fiscal year and sets us up for long-term success,” said Cassandra Lichnock, CalSTRS chief executive officer, in the press release accompanying the annual CalSTRS sustainability report “We constantly adjusted to meet each unprecedented challenge on behalf of our members, as we worked through soaring inflation, the COVID-19 pandemic, geopolitical turmoil, and the many floods and wildfires related to climate change.”

Achieving “net zero” by definition is when the amount of greenhouse gases emitted by humans gets offset by the amount taken away, either by natural means such as plant life, or by technological based carbon capture and storage. Achieving “net zero” for CalSTRS means that companies in CalSTRS’ portfolio will not emit any greenhouse gases unless they are offset by reductions within the portfolio.

In 2022, the Teachers’ Retirement Board committed to four additional measures: “reduce greenhouse gas emissions across the portfolio by 50% by 2030; incorporate a comprehensive analysis of greenhouse gas emissions into investment decisions; allocate 20% of the Global Equity Portfolio to a low-carbon index to help reduce emissions; and integrate various climate-related scenarios into CalSTRS’ study of asset allocation and liability management to help guide investment decisions.”

Into 2023 the pension plans to “reduce portfolio emissions in a phased manner over time, escalate corporate and policy-related engagement activities in the broader economy, and define low-carbon investments and opportunities to increase investments that meet our risk-return goals.”

“Our long-standing focus on sustainability and resiliency served us well last fiscal year and sets us up for long-term success,” said Cassandra Lichnock, CalSTRS chief executive officer, in the press release of the unveiling of the annual CalSTRS sustainability report “We constantly adjusted to meet each unprecedented challenge on behalf of our members, as we worked through soaring inflation, the COVID-19 pandemic, geopolitical turmoil, and the many floods and wildfires related to climate change.”

Social Impacts

A part of fostering long-term sustainability for CalSTRS is being representative of the large demographics of its’ members, through both representation at various organizational and in the boardroom. The current staff of the CalSTRS employment base is 58.5% female, representative that a majority of pension members in the system are female.

CalSTRS highlighted the importance of continuing their progress on their DEI initiatives into 2023. Succeeding in this, CalSTRS features an internal inclusion council in its operations. The council has executive sponsorship and meets monthly as part of an effort to create “positive, inclusionary change.”

In 2022, the inclusion council worked to guide CalSTRS’ existing diversity and inclusion programs, advancing and growing internal initiatives; with efforts focusing on “addressing competence, dignity, organization development, and social justice,” while posing an internal guiding question of what “equity” exactly means to CalSTRS. The report conveyed that the council looked at best practice organizations, legal definitions and other private and public state agencies’ definitions and policies.