CPPIB Reports 6.8% Net Returns | Chief Investment Officer

The Canada Pension Plan Investment Board achieved a 6.8% gain in its portfolio for the fiscal year beginning April 1, 2021, and ending March 31, 2022, the fund reported Thursday.

The fund has $420 billion (C$539 billion) in assets under management, which is $42 billion more than last year’s figure of $387 billion (C$497 billion). Of the increase, $26.5 billion (C$34 billion) was due to investment returns while the other $6.2 billion (C$8 billion) came from transfers from the Canada Pension Plan.

In addition to its 6.8% investment returns over the past year, the pension fund reported 10.0% annualized returns over the past five years and 10.8% annualized returns over the past 10 years. John Graham, president and CEO of CPPIB, said in a press release that he is proud of the fund’s performance despite a difficult final quarter. For comparison, CPPIB’s returns over the 2021 calendar year were 13.8%. The fund reported its highest return ever in fiscal year 2021, at 20.4%.

“CPP Investments delivered solid returns in fiscal 2022 despite turbulent market conditions in the wake of Russia’s war on Ukraine, supply chain disruptions caused by the pandemic and rising inflation,” said Graham. “Our 10-year performance of nearly 11%, the same as it stood at the end of the last fiscal year, demonstrates the enduring growth of the Fund over the long haul on the one hand, with steady resilience during uncertain times on the other.”

The Canadian dollar’s appreciation against the U.S. dollar was also a source of trouble for CPPIB this year. The fund estimates that foreign currency loss cost them $4 billion.

Private equity continued to be the most profitable asset class for CPPIB, returning 16.1% in the fiscal year that ended March 31, an increase from the prior fiscal year’s figure of 15.4% returns. Public equity performance declined, returning 9.0% through March 31 compared to the prior year’s 12.5%. Fixed income performed the worst of all asset classes, returning 1.4%, a decline from the prior year’s 2.2%.

The pension giant also highlighted some of its larger individual investments over the course of the year. Among CPPIB’s biggest equity investments listed was an $800 million investment in Indian e-commerce private entity FlipKart Group. The company competes with Amazon subsidiary Snapdeal in India to provide consumers with online shopping and delivery services. The company is currently valued at $37.6 billion, and there has been talk of it going public in the next few months. In addition, CPPIB invested $150 million in the National Stock Exchange of India, indicating that the pension fund is bullish on the country.

CPPIB also committed $600 million to Baring Asia Private Equity Fund VIII, a pan-Asian private equity firm that specializes in minority growth investments and controlled buyouts.

Among dispositions, CPPIB highlighted its decision to sell its 15% to 18% stake in its six Raffles City real estate projects in China. CPPIB reported that it expects to take home $620 million before closing adjustments on the investment.