Canada's biggest public pension plan sees opportunity in market slump

TORONTO (Reuters) - The Canada Pension Plan Investment Board (CPPIB), Canada’s biggest public pension plan, sees short-term and long-term opportunities arising from the sell-off across global equity markets, its Chief Executive Mark Machin said on Friday.

The fund, which manages Canada’s national pension fund and invests on behalf of 20 million Canadians, is a major investor in global equity and bond markets as well as being one of the world’s biggest infrastructure and real estate investors.

“The short term opportunities are things that our public market investing desks will be looking at,” Machin said in an interview. “They will be looking at better entry points into stocks that they’ve had under research for a long time or they hold and this would be a good opportunity for them to get into at a better price.”

Machin had said last year that the fund was being priced out of infrastructure deals because of investor demand for the assets leading to inflated prices, but on Friday he said prices could start to normalize in infrastructure, real estate and private equity markets.

“It’s been increasingly challenging to find those opportunities at good prices so a bit of normalization in markets is quite helpful for us to find more opportunities,” he said.

The fund on Friday said it achieved a return of 4 percent on its investments in the latest quarter, helped by strong equity markets.

The CPPIB said it ended its third quarter to Dec. 31 with net assets of C$337 billion ($267 billion), compared with C$328 billion at the end of the previous quarter.

Over the last 10 years, the CPPIB has seen returns of 7.4 percent, it said.

Canadian pension plans, on average, achieved returns of 4.4 percent in the latest quarter, according to research published by RBC Investor & Treasury Services on Tuesday.

($1 = 1.2604 Canadian dollars)

Reporting by Matt Scuffham; Editing by Jeffrey Benkoe and Tom Brown