* Aggressive stance reflects confidence in global economy
* CEO says financial system in better shape than in 2008
* CPPIB added C$5 bln to net assets in quarter
* Private equity, real estate contribute to increase
* Paris property market viewed as attractive investment
By Pav Jordan
TORONTO, Aug 11 Canada Pension Plan Investment
Board, one of the world's top private equity players, is
looking to buy assets again, taking advantage of renewed market
turbulence after stepping back three months ago.
The aggressive stance by the investment arm of the
nation's public pension fund reflects confidence that the
global economy will eventually start growing again, its chief
executive said on Thursday after CPPIB's quarterly results.
David Denison said world financial systems are
fundamentally better prepared to handle economic shocks than
they were during the 2008 crisis.
"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," Denison said in an interview.
"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 became
buyers of some of the world's largest private-equity assets
with the onset of the last global economic crisis.
With investment time horizons stretching out for decades in
some cases, CPPIB and others bought assets in distress in areas
ranging from infrastructure to shopping malls to telecoms.
NET ASSETS RISE
Such risk-taking in part contributed to a solid increase in
the Canada Pension Plan's net assets in the fiscal first
quarter ended June 30.
Assets rose to C$153.2 billion ($154.7 billion) from
C$129.7 billion a year earlier, boosted by investment income
from infrastructure, real estate and private equity holdings.
Assets were up 5.5 percent in the quarter from the end of
March, even as equity markets retreated.
"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 participated in many of the largest private
equity deals of recent years.
Together with partner Silver Lake, CPPIB in May said it was
selling a stake in Internet phone service Skype to Microsoft
Corp (MSFT.O) for $8.5 billion. The group made 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
heavy exposure to euro-zone debt, 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 net assets to rise to C$465 billion by 2030
and to 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)