The Public Sector Pension Investment Board (PSP Investments) recorded an investment return of 16.3% for the fiscal year ended March 31, 2014.

The performance was driven primarily by strong results in public market equities as well as in the private equity, renewable resources, real estate and infrastructure portfolios.

The fiscal year 2014 investment return exceeded the policy portfolio return of 13.9%, representing $1.8 billion of value added over the benchmark return.

“Once again, performance was strong across the board with all investment teams contributing to value added over benchmark returns,” says John Valentini, interim president and CEO, and chief financial officer. “Most notably, from a performance perspective, we have outperformed the long-term rate of return objective used by the chief actuary by 0.9% per year over the past 10 years.”

Consolidated net assets reached a record $93.7 billion, an increase of $17.6 billion, or 23%, over the previous year. PSP Investments generated net investment income of $12.6 billion for fiscal year 2014 and received $5 billion in net contributions.

For fiscal year 2014, returns on public market equities ranged from 6.1% for the emerging market equity portfolio to 38.7% for the small cap equity portfolio. The fixed income portfolio generated a return of 4%, while the return for the world inflation-linked bonds portfolio was 6.9%.

In private markets, all asset classes posted solid investment returns for fiscal year 2014 led by private equity and renewable resources with returns of 24% and 20%, respectively. Real estate recorded a 12.2% investment return, while the infrastructure portfolio earned an investment return of 9.4%. The private asset returns reflect the currency hedging of these assets.

The asset mix as at March 31, 2014, was as follows: public market equities (52.8%), nominal fixed income and world inflation-linked bonds (17.7%), real estate (11.4%), private equity (9%), infrastructure (6.4%), cash and cash equivalents (1.9%) and renewable resources (0.8%).

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