* CPPIB says added C$5 billion to net assets in quarter
* Private equity, real estate portfolios contribute
* Announced sale of Skype stake to Microsoft in May
(Recasts, adds CEO comments)
By Pav Jordan
TORONTO, Aug 11 Canada Pension Plan Investment
Board, one of the world's top private equity players, has
switched back to buying mode amid renewed market turbulence,
after stepping away from frothier markets three months ago.
CPPIB Chief Executive David Denison also told Reuters in an
interview on Thursday he saw continued growth for the global
economy, and said financial systems were fundamentally better
prepared to handle economic shocks than they were in 2008.
"While there are heightened risks to the global economy, we
do think that there will be sustainable growth, even if it
won't be in a nice straight line or as robust as what we'd
expected," he said.
"The financial system is in much, much better shape than it
was in 2008, although there are risks. We think conditions are
Deep-pocketed Canadian pension fund administrators like
CPPIB became buyers of some of the world's largest private
equity assets with the onset of the global economic crisis.
Investment time horizons, stretching out for decades in
some cases, helped them buy assets in distress in areas ranging
from infrastructure to shopping malls to telecoms.
NET ASSETS RISE
The CPPIB -- the investment arm of the nation's public
pension fund -- said on Thursday the Canada Pension Plan's net
assets rose to C$153.2 billion ($154.7 billion) at the end of
the second quarter. That compared with C$129.7 billion in the
year-ago period, boosted by investment income from
infrastructure, real estate and private equity holdings.
Assets were up 5.5 percent in the second quarter from the
first quarter, despite a broader equity-market retreat.
"While major equity indices were down this quarter, the
fund's private equity holdings and real estate portfolio helped
deliver positive results overall," Denison said.
CPPIB has consistently been a player in some of the largest
private equity deals of recent years.
Together with partner Silver Lake, CPPIB announced the sale
in May of a stake in Internet phone service Skype to Microsoft
Corp (MSFT.O) for $8.5 billion. The group bought into the
investment in September 2009, for $1.9 billion.
At the time, CPPIB said it expected to become a less active
buyer because loosened credit and other sources of liquidity
were driving up competition -- and prices -- for good assets.
"Well, certainly those frothy conditions are a distant
memory, and now we are prepared to transact," said Denison.
In France, where banks have come under scrutiny for their
high exposure to some of the European countries where debt
levels are starting to look unmanageable, CPPIB will have its
eye on the Paris real estate market.
"It's very hard to buy there, so if somebody wanted to sell
one of those office buildings in Paris, we'd be interested,"
CPPIB expects to have net assets of C$465 billion by 2030
and more than C$1 trillion by 2050, far outstripping
commitments to 17 million contributors and beneficiaries.
As of June 30, equities represented 51.8 percent of its
investment portfolio, with C$55.3 billion (36.1 percent) in
public equities and C$24.1 billion (15.7 percent) in private
Fixed income, including bonds, money market securities and
other debt and debt financing liabilities represented 31.1
percent of the portfolio, or C$47.7 billion.
Inflation-sensitive assets made up C$26.2 billion of its
total assets, including real estate, infrastructure assets and
(Reporting by Pav Jordan; editing by Frank McGurty and Rob