UPDATE 1-CPPIB prepared to wait for deals as assets fully valued

Fri Nov 8, 2013 2:40pm EST

* Canada pension fund chief eyes passive investments if needed

* Gross investment returns at 1.8 pct in fiscal second quarter

* Net assets increase to C$192.8 billion

By Andrea Hopkins

TORONTO, Nov 8 (Reuters) - The Canada Pension Plan Investment Board, one of the world's biggest pension fund investors, is prepared to sit back and wait for good deals to come along since most assets appear fully valued right now, its chief executive said on Friday.

The head of CPPIB, which reported gross investment returns of 1.8 percent to help grow its net assets to C$192.8 billion in its latest quarter, said the fund will stick its money in passive investments if needed as it waits for investment opportunities where the price is not too high.

"We see assets by and large around the world and across asset classes as being fairly valued. That means for an investor like us it is more difficult to find ... those real value opportunities," CPPIB Chief Executive Mark Wiseman said in an interview.

"Where we don't see value, we will simply allow the portfolio to remain invested where it is today, including in passive industries."

The CPPIB and Canadian pension fund peers such as the Ontario Teachers' Pension Plan and Caisse de dépôt et placement du Québec have been among the world's most active dealmakers in recent years, making major bets in Canada and abroad.

CPPIB manages Canada's national pension fund and routinely makes major acquisitions in global real estate, infrastructure and private equity, as well as in public equity and fixed-income markets.

The CPPIB said its gross investment returns of 1.8 percent in its fiscal second quarter reflected gains in global equity markets. Its net assets of C$192.8 billion ($183.80 billion) at the end of the quarter compared with C$188.9 billion after the previous quarter.

The C$3.9 billion increase in assets in the quarter consisted of C$3.3 billion in net investment income after operating costs and C$0.6 billion in net contributions.

Its asset mix at the end of September stood at 33.4 percent public equities, 17.2 percent private equities, 32.3 percent fixed income, 11.4 percent real estate and 5.7 percent infrastructure.

"Domestic and foreign equity markets, and gains in each of our active investment programs, contributed to the increase in the CPP Fund during the quarter. Overall, investment returns were consistent with the expected performance of a balanced portfolio," Chief Executive Wiseman said in a statement.

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