By Andrea Hopkins
TORONTO Feb 14 The Canada Pension Plan
Investment Board (CPPIB), one of the world's biggest pension
funds, notched another quarter of strong returns but its chief
executive officer said he wishes the fund had been more
aggressive when prices were cheap.
CPPIB, which manages Canada's national pension fund and is a
major global dealmaker, said it had gross investment returns of
5.9 percent for the third quarter ended Dec. 31, taking its
five-year investment rate of return to an annualized 7.2
The fund's deep pockets and long investment horizon helped
it complete deals that rivals could not make when times were
tough. But the global economic recovery has meant an increase in
competition and asset prices that are no longer such a good
In retrospect, CEO Mark Wiseman said he wishes the fund had
been even more aggressive in deal-making five years ago, given
the market recovery.
"I think a lot of people thought we were overly aggressive,
but hindsight is 20/20. Should we have bought more assets? We
probably should have, because almost everything we did in that
period has worked out incredibly well," Wiseman said in an
The payoff for making big successful bets in the wake of the
financial crisis pushed CPPIB's net assets to a record C$201.5
billion ($183.57 billion) in the third quarter, compared with
C$192.8 billion at the end of the previous quarter.
CPPIB began really diversifying beyond traditional financial
assets like stocks and bonds in 2006, and was sideswiped by the
financial crisis in 2009. But big global deals in assets like
real estate and infrastructure have boosted the fund's rate of
return, and it has opened offices in London, New York, Hong Kong
and, in April, Sao Paulo, Brazil.
The fund's asset mix was 50.2 percent equities, 33.3 percent
fixed income and 16.5 percent real assets at the end of 2013,
with 10.9 percent in real estate and 5.6 percent in
Wiseman said CPPIB will continue to look to higher-growth
economies like those in Latin America for investment
opportunities as competition drives up prices elsewhere, but the
fund will have to pick its deals carefully.
"You're not seeing a lot of opportunity in the market
because markets are strong and we seem to be in a period now
where there is a fairly high degree of stability, compared to
five years ago, and that means assets by and large tend to be
fairly valued," Wiseman said.
"So for CPPIB that means picking our spots very, very
carefully and it means continuing to build capabilities in those
areas where in the long run we think that growth is going to
exceed the global average."
The new Sao Paulo office, announced this month, will serve
as the hub for CPPIB's investments in Brazil, Chile, Colombia,
Mexico and Peru. The fund already has nearly C$5 billion in
invested assets in the region.