Canada Pension Plan Investment Board earned 1.3% in the fiscal year ended March 31 as declines in equity and fixed income markets eroded the benefits of a weaker Canadian dollar and gains in infrastructure.
(Bloomberg) — Canada Pension Plan Investment Board earned 1.3% in the fiscal year ended March 31 as declines in equity and fixed income markets eroded the benefits of a weaker Canadian dollar and gains in infrastructure.
The fund, Canada’s largest, grew to C$570 billion ($421 billion), from C$539 billion at the end of the previous fiscal year, according to a statement Wednesday.
“Despite significant declines in global equity and fixed income markets during our fiscal year, our investment portfolio remained resilient, delivering stable returns while outperforming major indexes,” Chief Executive Officer John Graham said.
The pension fund gained C$8 billion in income, while the remainder of the C$31 billion increase in assets came from greater-than-usual inflows, due partly to higher employment rates.
The results reflect returns from infrastructure and U.S.
dollar-denominated private equity and credit investments, the pension fund said. The Canadian dollar’s weakness against the US dollar and some other major currencies had a positive impact on investment returns with a foreign currency gain of C$25 billion, it said.
Overall, operating expenses increased by C$112 million as the cost of talent rose and CPPIB made improvements to its technology and data infrastructure.
Canada’s largest pension fund has stuck to its China strategy and has 9.8% of its assets invested the country, public affairs head Michel Leduc told lawmakers earlier this month.
That exposure gives the fund access to one of the world’s fastest-growing major economies.
CPPIB’s holdings include retail and industrial real estate, private equity funds and stakes in businesses including McDonald’s China and Adopt a Cow, a dairy operation.
The pension fund has invested $292 million for a 9.3% stake in the Hong Kong-listed shares of China Tourism Group Duty Free, it said in its report Wednesday. It also invested $75 million in a mezzanine loan backed by a sponsor-owned, Grade-A office and retail property in Shanghai.
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