The Canada Pension Plan (CPP) has reported a 4.2% decline in its assets over the latest quarter to C$523 billion (US$410 billion) due to a net loss of C$23 billion, alongside C$7 billion in net transfers.
For the five- and 10-year period ended June 30, the portfolio returned an annualized net 8.7% and 10.3%, respectively. Moreover, the portfolio still managed to gain C$3 billion in value, despite the market turmoil following the Russian invasion of Ukraine.
Losses were driven by public equity strategies, in line with a common theme across the state investor sector. However, losses were also reported in private equity, credit and real estate. CPPIB said "losses in public equity strategies, due to the broad decline in global equity markets," while investments in private equity, credit and real estate "contributed modestly to the losses this quarter." Gains by external portfolio managers, quantitative trading strategies and investments in energy and infrastructure "contributed positively to this quarter's results," according to CPP.
By region, the plan's asset allocation was 35.6% US, 27.3% Asia-Pacific, 15.9% Canada, 15.7% Europe and the rest in Latin America.
In Q1 of the current fiscal year, in its debt strategies, it reported it had committed C$230 million investment in the term loans of Legal Search, US$160 million to Brazil-focused Lumina Strategic Solutions Fund, and invested US$100 million in a loan for Asian airlines outsourcing company IGT Solutions.
Alongside stablemate Alberta Investment Management Corp (AIMCO) and Manulife Investment Management, it ramped up commitments to BAI Communications, a global communications infrastructure provider, and confirmed it had invested a total of C$3 billion since 2009. It also raised its stake in the in the Bullring Shopping Centre in Birmingham, UK to 50% with total value of C$439 million, invested an additional US$150 million in British renewables provider Octopus Energy. CPP also committed a further C$700 million to Indian toll road operator IndInfravit Trust.
In private equity, CPP also invested EUR400 million in buyout fund EQT X, US$100 million in Trustar Capital V, and US$50 million in the tech-oriented Radical Fund III. In co-investments, CPP committed to a US$120 million co-investment alongside private equity firm CVC Capital Partners for up to a 17% stake in Indian agrochemical firm Sajjan, US$50 million in a co-investment alongside private equity firm Silver Lake for a 4% stake in proptech firm Entrata, and a US$50 million co-investment alongside Indian private equity firm Multiples in insurtech platform Acko Tech & Services for a 5% stake.
CPP also invested US$65 million into South Korean grocery provider Fresheasy for an approximate 9% stake, US$50 million co-investment in US cloud software provider Anaplan, US$35 million into gaming-oriented company Razer, and US$34 million investment into Indian SME lender Kogta Financial. In real assets, CPP committed US$300 million to the China-oriented Hillhouse Real Asset Opportunities Fund. It also acquired four onshore wind farms in central Sweden through Renewable Power Capital, and pledged to commit an additional EUR803 million in the platform.
John Graham, president and CEO, said, "Financial markets experienced the most challenging first six months of the year in the last half-century, and the fund's first fiscal quarter was not immune to such widespread decline. However, our active management strategy — diversified across asset classes and geographies — moderated the impact on the fund, preserving investment value."
