UPDATE 1-CPPIB assets under management jump to C$148.2 bln

Thu May 19, 2011 3:09pm EDT

* Canadian assets 48.3 pct, foreign assets 51.7 pct

* Sees assets under management of over C$1 trln by 2050

* CPPIB says completed 50 global transactions in year

* Sees growing competition for deals as economy improves

By Pav Jordan

TORONTO, May 19 (Reuters) - The Canada Pension Plan Investment Board, which manages the country's national pension fund, said on Thursday its assets under management rose to a record C$148.2 billion ($152.8 billion) in fiscal 2011.

The fund manager said its portfolio returned 11.9 percent for the year ended March 31, compared with a 14.9 percent return in the year-earlier period.

CPPIB and other Canadian pension fund administrators took advantage of long-term investment horizons -- as far out as 50 or 75 years in some cases -- to scoop up cheap assets in the wake of the global financial crisis.

CPPIB'S president and chief executive, David Denison, said assets under management were projected to continue to grow rapidly over coming decades, to C$275 billion by 2020, C$465 billion by 2030, and over C$1 trillion by 2050.

"Even at that point, looking that far ahead, the projected annual income, investment gains on the portfolio, will still be four times the amount that is required to be drawn from the fund to help supplement contributions, to meet payments to pensioners," he said.

CPPIB invests on behalf of 17 million Canadian contributors and beneficiaries.

CPPIB's asset base was driven higher in fiscal 2011 by C$15.5 billion in investment income and C$5.4 billion in net Canada Pension Plan contributions.

The plan's asset mix saw a slight shift in the year toward ownership of more foreign assets, with 51.7 percent of the portfolio comprised of assets outside of Canada.

Equities represented 53.5 percent of the investment portfolio, or C$79.4 billion, consisting of 38.2 percent public equities and 15.3 percent private equities.

Fixed income -- bonds, other debt, money market securities and debt financing liabilities -- accounted for 30.1 percent.

And inflation-sensitive assets like real estate and infrastructure represented 16.4 percent of those assets, valued at some C$24.3 billion.

LOW LYING FRUIT

The CPPIB is Canada's second-largest pension fund administrator and arguably the nation's most active, large-scale private equity player on global markets.

During the economic crisis, as traditional private equity players were shoring up capital, the CPPIB was among the world's most aggressive acquirers.

The past year has been no exception.

In calendar 2010, acting in conjunction with Onex Corp (OCX.TO), CPPIB was involved in the largest global private equity deal of the year, with the C$5.0 billion leveraged buyout of Tomkins Plc TOMK.L, a British maker of car parts, industrial hoses and bath tubs.

It was the second year running that CPPIB has been in on the largest global private equity deal of the year.

"During fiscal 2011 we were able to take advantage of the deep expertise of our investment teams to make some notable additions to our private equity, infrastructure, real estate and private debt holdings," Denison said during a discussion with journalists on Thursday.

The plan made its first U.S. real estate deals in years in fiscal 2011, buying stakes in two prime buildings in Manhattan.

"Fiscal 2011 was an exceptionally active year for our real estate program," said Mark Wiseman, executive vice-president for investments, when the group made C$3.3 billion in new investments.

MAPLE GROUP

The CPPIB is part of a consortium of Canadian banks and pension funds called Maple Group that is proposing to buy Toronto Stock Exchange operator TMX Group (X.TO).

The C$3.6 billion, cash and stock deal is viewed as a "made-in-Canada" alternative to a rival, all-stock offer from London Stock Exchange (LSE.L), which is valued at $3.0 billion and which has met with political opposition.

"We believe, for us, this is simply an investment as we see it on its merits as an opportunity to create long term value," Wiseman said of the Maple Group's proposal.

"As a market participant, we believe it will enhance the long-term efficiency of Canadian capital markets."

($1=$0.97 Canadian) (Reporting by Pav Jordan; editing by Rob Wilson and Peter Galloway)

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