CPPIB has over 5 trillion assets after recording a 6.8% return

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The Canadian Pension Plan Investment Board has surpassed the $ 5 trillion threshold in the most recent fiscal year and reached $ 538 billion in assets as of March 31.

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This year’s net income was 6.8% compared to last year’s $ 497 billion, with $ 8 billion of the $ 42 billion increase coming in the form of a net transfer from the Canadian pension system.

The CPP fund has a 5-year return of 10% and a 10-year return of 10.8%.

John Graham, Chief Executive Officer of the Pension Management Organization, said:

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“The 10-year performance of nearly 11%, the same as at the end of last year, shows the lasting growth of the long-term (CPP) fund … with steady resilience in uncertain times.”

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Private equity, infrastructure, real estate and credit investments contributed significantly to the fund’s overall performance in 2022.

Pension giants said returns in the first nine months of the year were constrained by “volatility affecting public equities in the final quarter, at a level not seen since the outbreak of the pandemic.”

For reference, CPP Investments stated that the fund’s return for the 12 months of 2021 was 13.8 percent, not the fiscal year it bleeded in 2022.

Bond prices also fell at a pace not seen in more than 40 years in the fourth quarter.

In addition, several factors, including rising commodity prices and the rise of the Canadian dollar against the US dollar and other major currencies due to currency and financial changes, caused a currency loss of $ 4 billion during the fiscal year, damaging earnings. Gave. Policy for the entire global economy.

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“For the future, we face uncertain business and investment conditions, rising inflation expectations, worsening supply chain disruptions, slower global economic growth forecasts, and wars in Europe. The international reaction to is against the backdrop of global pandemics and persistent climate change, “Graham said.

However, he said, the diversification strategy of pension management organizations and the breadth of the market, coupled with local presence and global brands, are in a “strong position” to move forward.

Graham said in an interview Thursday that the long-standing strategy of investing in real estate, such as infrastructure and real estate, puts pension funds in a position to survive higher inflation than expected a year ago.

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“In fact, it’s an area we’re trying to grow. It has good, strong total returns and some protection against inflation,” he said.

“Growing faster than many other areas.”

In this week’s report, Fitch Ratings is tracked by rating agencies, including the CPP Investment Commission. Canadian pension funds are “good” to withstand higher inflation and moderate economic growth amid increasing market volatility. It’s in position. “

Equity market volatility and the Asia Pacific region created some “headwinds” in the final quarter of CPP Investments, but Graham said his team will continue to invest in the region and the entire market sector.

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“We are benefiting from diversity and will continue to operate in both public and private equity markets around the world,” he said.

The Asia-Pacific market exemplifies the benefits of the strategy, with the region showing the second highest performance of CPP investment in the last five years, despite a recession in recent months amid growth and geopolitical concerns. Said that.

“We certainly understand that investment methods are really important and we spend a lot of time thinking about how to invest in these different countries around the world,” he said. Access to large emerging economies is a fund that invests donations and profits to pay Canadian retirement.

“We don’t have a tight allocation to countries,” Graham said. “We think about our exposure in emerging markets and how much we want our portfolio globally, and capital goes where we have the best opportunities.”

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