CPPIB earns 5% net return in fiscal Q2

The Canada Pension Plan Investment Board ended its second quarter of fiscal 2021 with net assets of $456.7 billion, up from $434.4 billion at the end of the previous quarter, according to a new report.

The $22.3 billion increase in net assets for the quarter consisted of $21.6 billion in net income after all costs and $700 million in net CPP contributions.

The fund, which includes the combination of the base CPP and additional CPP accounts, achieved 10-year and five-year annualized net nominal returns of 10.5 per cent and 9.6 per cent, respectively. For the quarter, the fund returned five per cent net of all CPPIB costs.

“CPP Investments’ diversified fund performed well this quarter, generating strong returns,” said Mark Machin, president and chief executive officer at the CPPIB, in a press release. “However, we continue to be cautious about the months ahead given the highly uncertain economic fallout of COVID-19 and its effect on markets. All of our investment departments generated positive returns this quarter. Our investment professionals continue to pursue opportunities that will bring value to the fund over the long term.”

The fund’s growth was primarily attributed to the continued recovery of global public equity markets in the first two months of the quarter, reflected in gains in both the fund’s public and private holdings, noted the release.

In other news, the CPPIB is appointing Frank Ieraci as senior managing director and global head of active equities, effectively immediately.

Since joining the CPPIB nearly 14 years ago, he’s held several positions, including managing director for head of research and portfolio strategy and active fundamental equities. Previously, he was an assistant portfolio manager in global active equities at the Ontario Teachers’ Pension Plan and a senior analyst at BMO Nesbitt Burns.

“Under Frank’s leadership, the active equities department will continue to help advance our long-term investment strategy and champion data-driven research and advanced analytics to improve long-term performance,” said Machin in a release.