Canada Pension Plan Investment Board (CPP Investments) posted positive fiscal 2023 year-end results as returns on investments in infrastructure helped offset declines in both equities and fixed income.
At the end of the fiscal 2023 year ending 31 March, the C$570bn (€390bn) Canadian pension fund recorded a net return of 1.3%, outperforming its reference portfolios’ benchmark return of 0.1%.
CPP Investments said the performance had been helped by its C$52bn infrastructure portfolio – which accounts for 9% of total assets – recording a five-year fund return of 8.1% at the end of the fiscal 2023 year ending 31 March. Its C$52bn real estate returned 2.9% during the same period.
Favourable foreign exchange in certain US dollar-denominated private equity and credit assets also helped the fund to generate positive returns.
CPP Investments has a real assets portfolio comprising real estate, infrastructure, and C$32bn of private equity investments associated with sustainable energies. The private equities portfolio posted a five-year fund return of 14.1% at the end of fiscal 2023.
CPP Investments ended its fiscal year on 31 March 2023 with a 10-year annualised net return of 10% and net assets of C$570bn, compared to C$539bn at the end of fiscal 2022.
CPP Investments, which held the top spot at the most recent Real Assets Top 100 infrastructure investors 2022 rankings, has pursued a number of real assets investments recently, including: the acquisition of a 49% stake in US energy producer Aera Energy; a $205m commitment to an Indian real estate fund managed by IndoSpace, and the securing of an 80,418-acre floating offshore wind lease off the central coast of California for US$150m through its Golden State Wind joint venture.
It also expanded its partnership with Octopus Energy with a further US$225m commitment to the partnership established in 2021.
Disposals made during the period, include exiting its investment in Crowne Plaza Times Square mixed-use hotel property in New York City, and agreeing to sell its 33.3% indirect stake in Skyway Concession Company, which manages, operates and maintains the Chicago Skyway toll road.
CPP Investments, which holds the 13th position in the recent IPE Real Assets Top 150 real estate investors 2023 rankings, also sold six logistics warehouses in Western China in the Goodman China Logistics Partnership.
John Graham, president and CEO at CPP Investments, said: “Our strong long-term return of 10% over 10 years demonstrates that our active management strategy is on track.
“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.”
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