Canada Pension Plan Investment Board generated returns of 6.8 per cent during its fiscal year, which ended on March 31, 2022.
The institutional investor’s assets grew by $42 billion, rising from $497 billion to $539 billion. The $42 billion increase in net assets consisted of $34 billion in net income and $8 billion in net contributions.
In a press release, John Graham, president and chief executive officer of the CPPIB, noted that the performance was hindered by market turbulence in the first quarter of 2022.
“CPP Investments delivered solid returns in fiscal 2022 despite turbulent market conditions in the wake of Russia’s war on Ukraine, supply chain disruptions caused by the pandemic and rising inflation. Our 10-year performance of nearly 11 per cent, the same as it stood at the end of the last fiscal year, demonstrates the enduring growth of the fund over the long haul on the one hand, with steady resilience during uncertain times, on the other.”
Private equity, which returned 16.1 per cent, was the highest performing asset class during the year, followed by infrastructure, which saw a 10 per cent return. With overall returns of nine per cent, the performance of public equities was diminished during the first three months of 2022. Fixed income, which generated returns of 1.4 per cent during the year, was the worst performing asset class. Another factor that depreciated the CPPIB’s overall performance was the appreciation of the Canadian dollar, with the year’s foreign currency losses totalling $4 billion.
In the next fiscal year, the CPPIB expects to face uncertain investment conditions with higher inflation expectations that will likely worsen existing supply chain disruptions, said Graham, noting the CPPIB also anticipates a year of tepid growth, partly as a result of the invasion of Ukraine by Russia.
“We move forward from a position of strength, focusing on our sound diversification strategy and a disciplined outlook beyond current events. Our confidence is grounded in the robust CPP Investments platform, designed for resiliency, with mature programs at scale, market breadth and local presence, amply supported by an admired global brand.”