* Fund's 10.1 pct investment return takes assets to C$183.3
* Sees opportunities in global infrastructure, private
* Says scale, sophistication will win deals rivals can't
By Andrea Hopkins
TORONTO, May 16 The Canada Pension Plan
Investment Board, one of the world's biggest dealmakers, said a
glut of cheap capital may mean it makes fewer big purchases in
2014, but it sees big opportunities in global infrastructure and
private equity in the months ahead.
CPPIB, which manages Canada's national pension fund, said on
Thursday its assets rose to a record C$183.3 billion ($180.12
billion) at the end of fiscal 2013, as its investment portfolio
returned 10.1 percent for the year ended March 31.
Chief Executive Mark Wiseman said CPPIB may be slightly less
active in dealmaking in the coming year because there is a lot
of capital flowing globally and prices are up, but he said the
fund will use its scale and long investment horizon to win deals
that are too big and complex for competitors.
"The reality is today there is a lot of capital, and assets
are fairly priced, and so we're being patient," Wiseman told
Reuters following the release of the fund manager's fiscal 2013
results. "But that doesn't mean that there are not opportunities
The fund struck 87 global deals - many as part of a
consortium - in fiscal 2013, including 36 deals worth more than
The year's big deals included the purchase of a stake in
motorcycle grand prix organiser Dorna, the financing of a loan
to Formula One Group, the investment in Australian shopping
malls and an expansion of its warehouse portfolio in Brazil with
Singapore-based Global Logistic Properties.
Wiseman said he expects another interesting year in global
infrastructure and private equity.
"We're looking at a number of opportunities on a global
basis around infrastructure - actually, I think at present we
are looking at opportunities in infrastructure on three
continents," he said.
"On the private equity side ... this is going to be a period
of time when private equity firms are selling assets, either by
IPOs or to strategic buyers, other private equity firms. But
again, we do believe we'll find selective opportunities in this
It was the seventh year of the fund manager's shift to an
active investment strategy. It is seeking to boost returns on
its massive portfolio by buying real estate, infrastructure and
other assets around the world, while providing both private
equity and credit to partners looking for cash.
Wiseman stressed the fund's long-term investment horizon,
saying its stability and "patient capital" makes it an
attractive partner in a world dominated by short-term thinking.
"For us, a 'quarter' is 25 years, not 90 days," Wiseman told
Efforts to diversify the portfolio have boosted foreign
assets to 63.3 percent of the portfolio, while Canadian assets
make up 36.7 percent of the book.
The 10.1 percent 2013 investment gain was up from 6.6
percent a year earlier and its fourth straight gain after the
fund manager suffered losses in 2008 and 2009. It boosted the
10-year annualized nominal rate of return to 7.4 percent.
CPPIB invests on behalf of 18 million Canadian contributors
and beneficiaries, and still has about eight years before
benefits paid exceed contributions and investment income will be
needed to help pay pensions, in 2021.
Since 2007, CPPIB has increased staff from 154 to 906 -
including 51 employees in London and 32 in Hong Kong - and
ratcheted up its holdings in private market investments in a bid
to outpace financial market returns offered by stocks and bonds.
Wiseman said the staff count would continue to grow and
diversify in geographical expertise, but at a slower pace than
in past years.
Investment returns were led by a 16.8 percent gain in
private foreign developed-market equities, a 13.2 percent rise
in public foreign developed-market equities, a 9.2 percent gain
in real estate, and an 8.8 percent gain in infrastructure.
Weaker parts of the portfolio included investments in
Canadian public equities, which returned 4.2 percent, Canadian
private equities, which returned 3.4 percent, public
emerging-market equities, which returned 2.4 percent, and
inflation-linked bonds, which returned 3.0 percent.