The Canada Pension Plan Investment Board saw a net investment return of 1.45 per cent at the end of the first quarter of its 2017 fiscal year.
As of June 30, 2016, its net assets reached $287.3 billion, compared to $278.9 billion at the end of the previous quarter.
“Global investors experienced ongoing volatility this quarter, generating mixed results across major equity markets,” said Mark Machin, president and chief executive officer of the Canada Pension Plan Investment Board, in a news release today. “Amid these challenges, the fund’s increase was primarily driven by positive fixed income performance, public equity gains in Canada and the U.S. and the performance of our private asset portfolio.”
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At the end of 2012, on the assumption that the fund attains a four per cent real rate of return, the chief actuary of Canada reaffirmed the CPP remains sustainable at the current 9.9 per cent contribution rate for the next 75 years. In his report, the chief actuary also said CPP contributions should exceed benefit payments until 2023, after which the plan will need some of the fund’s investment income to pay pensions.
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The board’s investment highlights for the past quarter include:
- A strategic partnership with Ontario Teachers’ Pension Plan and Impulsora del Desarrollo y el Empleo en América Latina to invest in a 223-kilometre toll road around Mexico City. The CPPIB will own a 29 per cent interest.
- Further investments in Teine Energy Ltd. to support its acquisition of southwestern Saskatchewan oil-weighted assets from Penn West Petroleum Ltd. The CPPIB now holds roughly 90 per cent of the company’s shares on a fully diluted basis.
- The acquisition, along with Cinven, of Spanish company Hotelbeds Group from the Tui Group.
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The CPPIB’s asset dispositions of the past quarter include:
- Selling its interest in four retail properties in British Columbia, Alberta and Ontario for $352 million.
- Selling its stake in Key Safety Systems for US$182 million.
CPPIB’s investment highlights following the quarter ending June 30 include:
- Investing US$280 million in convertible preferred-equity securities of the solid waste company Advanced Disposal Services Inc. in Florida.
- Crestone Peak Resources, an entity 95 per cent owned by the CPPIB, acquired the Denver Julesburg basil oil and gas assets from a subsidiary of Encana Corp. for $609 million U.S.
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