The Canada Pension Plan Investment Board (CPPIB) saw its assets grow in its fiscal third quarter, backed by strong returns from global equity markets.
For the quarter ending Dec. 31, 2012, the fund posted net assets of $172.6 billion, compared with $170.1 billion at the end of the previous quarter. The portfolio had a gross investment return of 3.0% for the quarter. The performance continued a run of strong returns for the nine-month fiscal year‐to‐date, with an overall increase in assets of $11 billion since March 31, 2012.
“We continued to see solid returns this quarter due to strong increases in global public equity markets and income generated by the portfolio’s private assets,” said Mark Wiseman, president and CEO of the CPPIB. “This quarter’s results reflect the strength and capabilities of our diversified global platform, as all investment groups delivered gains.”
Investment highlights during the fiscal third quarter include the following:
- Private investments
• purchased $105 million in senior unsecured notes in Just Energy Group Inc., a TSX‐listed marketer of gas and electricity to residential and commercial customers primarily in North America;
• entered into a subscription agreement to purchase US$200 million in senior unsecured notes in Legacy Oil + Gas Inc., a Calgary‐based intermediate oil and gas producer in Western Canada;
• completed a debt agreement with Formula One Group—a sports management group that holds the rights to the FIA Formula One World Championship—to finance US$400 million of a US$1 billion private high-yield loan;
• the November 2012 completion of two significant transactions: the acquisition of Suddenlink Communications, the seventh largest cable company in the U.S., for US$6.6 billion by CPPIB, BC Partners and Suddenlink management; and the acquisition from Tomkins of its Air Distribution division, a leading manufacturer of non‐residential and residential air distribution system components, for US$1.1 billion; and
• an agreement to acquire a 39% stake in Dorna Sports S.L. alongside current shareholders, Bridgepoint and Dorna management.
- Public market investments
• the sale of CPPIB’s investment in Progress Energy Resources Corp. for $780 million, following the acquisition of Progress Energy by PETRONAS’ Canadian subsidiary, PETRONAS Carigali Canada Ltd.; and
• an agreement with Halcón Resources Corp. to purchase US$300 million of the company’s common stock. This transaction closed in December 2012 upon completion of Halcón’s acquisition of significant Williston Basin assets.
- Real estate investments
• an agreement to acquire Kista Galleria Shopping Centre in Stockholm, alongside Citycon Oyj, a major owner and operator of shopping centres in the Nordic and Baltic countries; CPPIB’s equity investment is approximately SEK1.20 billion (C$178 million) in the 50/50 joint venture;
• the significant expansion of CPPIB’s logistics real estate portfolio in Brazil through a joint venture alongside Global Logistic Properties Ltd. and two other large global institutional investors; CPPIB has committed US$343 million for the joint acquisition of two logistics portfolios in Brazil; and
• an interest in two prime Australian shopping centres through an equity investment of $445 million in AMP Capital Retail Trust (ACRT), a trust that owns 50% of Macquarie Centre in Sydney and 80% of Pacific Fair Shopping Centre on the Gold Coast; CPPIB’s ownership interest in ACRT totals 37%.