Despite CPPIB Investment Loss, Strong Contributions Lift Assets

(August 11, 2010) — The Canada Pension Plan Investment Board (CPPIB) today released its fiscal first quarter results, stating that assets under management edged up as contributions offset shrinking investment value.

For the quarter ended June 30, the manager of the country’s national pension fund said its net assets rose to $123.9 billion (C$129.7 billion) from $121.9 billion (C$127.6 billion), boosted by $3.6 billion (C$3.8 billion) in contributions from plan members that offset a $1.6 billion loss on investments.

“This was a challenging quarter for public equity markets around the world, many of which experienced double-digit declines,” said CPPIB’s President and CEO David Denison in a release. “This was also a quarter where the CPP Fund benefited from diversification into private equity, real estate, infrastructure and private debt holdings.”

During the first fiscal quarter, CPPIB  took part in a multitude of deals: In July, CPPIB announced and acquisition that represented a 17.1% stake in Calgary oil sands company Laricina Energy for $237 million. The purchase reflected the fund’s first venture into northern Alberta’s oilsands industry, giving CPPIB, one of Canada’s largest institutional investors, the right to nominate a board director at the company.

Additionally, CPPIB bought into the Manhattan real estate market for the first time in early May, taking stakes in skyscrapers valued at more than $1.45 billion.

Meanwhile, the Canadian investment fund was involved in three of the top five global private equity deals last year, which included the $4 billion acquisition by CPPIB and TPG, a US private equity firm, of prescription drug sales data provider IMS Health Inc.

In terms of allocation, equities account for about 54% of the CPPIB’s portfolio, a percentage that consists of a 40.8% investment in public equity markets and 13.1% in private equity holdings. Except for public equity holdings, all of the CPPIB’s other asset groups posted positive returns for the quarter. According to a release by the board, fixed income, which includes bonds, money market securities, other debt and debt financing liabilities, represented 32.0% or $41.5 billion. Inflation-sensitive assets represented 14.1% or $18.3 billion. Of those assets,

• 6.1% consisted of real estate valued at $7.9 billion
• 4.7% was infrastructure assets valued at $6.1 billion
• 3.3% was inflation-linked bonds valued at $4.3 billion