* Qtrly performance boosted by Petronas-Progress deal
* CEO says fund will continue to diversify its portfolio
* Net assets in fiscal Q3 rise to C$172.6 bln
By Euan Rocha
TORONTO, Feb 15 The Canada Pension Plan
Investment Board, one of the world's biggest pension funds, said
on Friday investment returns grew in its fiscal third quarter as
global equity markets strengthened.
Returns for the period, ended Dec. 31, received an added
bump from one of the largest energy deals of 2012 - the takeover
of Canadian natural gas producer Progress Energy by Malaysian
state oil company Petronas for C$5.17 billion ($5.16 billion).
CPPIB, which manages Canada's national pension fund, said it
had made C$384 million in equity investments in Progress in 2010
and 2011. It sold these investments for C$780 million, when the
Petronas-Progress deal closed late last year.
The fund manager said it ended the quarter with net assets
of C$172.6 billion, up from C$170.1 billion at the end of the
CPPIB and its Canadian pension fund peers like 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.
The investments have focused largely on real estate, natural
resources and infrastructure. CPPIB has however also invested in
some more unconventional areas. Last year it announced two major
investments in the world of motor racing.
"Our goal is to continue to diversify the portfolio both by
asset class and by geography with a slowly increasing focus on
global growth markets," said CPPIB Chief Executive Mark Wiseman,
in an interview.
CPPIB said the C$2.5 billion increase in its net assets in
the quarter came from C$5 billion in investment income, after
deductions for seasonal cash outflows. The fund routinely gets
more contributions than are required to pay benefits during the
first part of the calendar year and then remits a portion of
those funds for benefit payments toward the end of the year.
"We continued to see solid returns this quarter due to
strong increases in global public equity markets and income
generated by the portfolio's private assets," said Wiseman,
adding that all CPPIB's investment groups delivered gains in the
Wiseman, who just returned from the World Economic Forum in
Davos, said he was surprised by the level of optimism from U.S.
business heads attending the annual brainstorming and networking
event in the Swiss Alps.
"I would suggest anecdotally speaking, that the view from
corporate America is much more positive than what the economic
numbers have borne out thus far," said Wiseman, adding that the
outlook for Europe however still remained gloomy.
"The amount of work that needs to get done to get Europe
back on a solid growth footing is enormous," said Wiseman. "I
continue to come away with the impression that Europe will
continue in recession and if there is a light at the end of the
tunnel it is a heck of a long tunnel."