CPPIB Surpasses Caisse, Claiming Record High Valuation

The Canada Pension Plan Fund hit a record high value of C$161.6 billion last year, adding more than $13 billion to its assets.

(May 18, 2012) — The Canada Pension Plan Fund, which manages Canada’s national pension fund, has reached a record-high valuation.

The fund hit a value of C$161.6 billion ($160.2 billion) last year, adding more than $13 billion to its assets and surpassing the valuation of the Caisse de depot et placement du Quebec at its fiscal year-end December 31.

The CPPIB’s valuation makes it the seventh-largest pension fund in the world.

Despite declines on the Toronto Stock Exchange and other public markets, the CPPIB saw a 6.6% rate of return in fiscal 2012, with gains in US and foreign equity markets, fixed-income instruments, along with private markets, including holdings in infrastructure and real estate. Meanwhile, the CPPIB is eyeing opportunities in Western Europe, Asia, Latin America.

“Overall our investment programs delivered a strong performance in fiscal 2012 despite the challenging global equity markets over the past year,” said David Denison, President and CEO, CPPIB. “While we witnessed dramatic fluctuations in global capital markets, our diversification of assets and growing number of global investments contributed to the Fund’s resilience.”

Denison added: “The fiscal 2012 performance of the Fund benefitted from our active management programs and private market holdings, which are less sensitive to the excessive volatility experienced by the public equity markets…As a longterm investor, we were able to take advantage of opportunities provided by market dislocations. We also expanded our global reach in order to participate in the growth and vitality of the world’s emerging markets.”

The fund benefitted from a total of 60 global deals in fiscal 2012, many as part of a consortium, including the US$6.1 billion acquisition of medical technology company Kinetic Concepts Inc and the purchase of a 24.1% stake in Norway’s Gassled gas transport infrastructure for C$3.2 billion.

“We are pleased that our 10-year annualized nominal rate of return of 6.2% is above the 4.0% prospective real rate of return that the Chief Actuary has incorporated in his latest report confirming the sustainability of the CPP, which was achieved even with the sharp declines in equity markets in recent years,” said Denison. “Although the recovery that began in 2010 and continued into 2011 faltered slightly this year, the 10-year return reinforces our confidence in the ability of the Fund’s current portfolio composition and our active investment strategy to generate the returns required to sustain the CPP at its current contribution rate over the longer term.”

«