Canada’s Public Sector Pension Investment Board announced on Monday that its assets had grown to C$264.9 billion ($192.71 billion) at the end of its fiscal year 2024, a period ending March 31, a 7.2% increase over the previous fiscal year. The pension fund also released its fiscal year 2024 annual report.
Strong returns were primarily found in the pensions’ equities, credit, private equity and infrastructure portfolios, with each delivering double-digit returns which exceeded their benchmarks.
“We recorded positive returns against a backdrop of the volatility of the last few years dominated by geopolitical uncertainty, inflation and rising interest rates,” said Eduard van Gelderen, CIO of PSP Investments, in a press release. “PSP Investments’ performance showcases the strength and resilience of our portfolio and the caliber of talent of our people.”
PSP Investments manages investments to fund the benefits for public service employees in Canada, as well as the Canadian armed forces, the reserve forces and the Royal Canadian Mounted Police, totaling more than 900,000 beneficiaries.
Asset Class Returns
Apart from the fund’s 7.2% fiscal year return, PSP’s portfolio has also returned an annualized 7.9% and 8.3% over the past five and 10 years, respectively.
PSP Investments’ capital markets portfolio, which is comprised of public equities and fixed income returned 17.5% in the fiscal year, with the equities portion returning 10.3% and the fixed income portion increasing by C$11.2 billion to C$56.2 billion.
Real estate was the worst-performing asset class in PSP’s portfolio, returning negative 15.9%, a loss of approximately C$5.1 billion. PSP notes that the primary drivers of its real estate losses were heightened interest rates, and a deterioration in office rents and occupancy in the North American market.
Private equity returned 12.1% in the fiscal year, ending the period with net assets of C$40.4 billion while generating portfolio income of C$4.5 billion. According to PSP Investments, strong returns in the private equity portfolio were made possible through the quality of the fund’s co-investment portfolio, as well as strong performance in financial and health care sector investments.
The fund’s credit investments returned 14.2% in the fiscal year, increasing to C$ 26.2 billion in assets. PSP’s infrastructure and natural resources portfolios returned 14.3% and 4.1% respectively, their assets increasing to C$34.5 billion and C$15.2 billion.
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Tags: Canada, Eduard van Gelderen, PSP Investments, Public Sector Pension Investment Board