CPP fund ended 2015 up nearly $10 billion in assets

For the nine month fiscal year-to-date period, the CPP Fund increased by $18 billion from $264.6 billion at March 31, 2015. This included $16.3 billion in net investment income after all CPPIB costs and $1.7 billion in net CPP contributions. The portfolio delivered a gross investment return of 6.3% for this period, or 6.1% net of all costs.

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“Income generated across our investment programs and the advance of global equities contributed to the Fund’s growth during the quarter, while fixed income results were mixed,” said Mark Wiseman, president and CEO of the CPPIB. “Our globally diversified portfolio allowed us to earn significant gains from foreign exchange, as the Canadian dollar depreciated against most foreign currencies.

“The design of our highly diversified portfolio continues to deliver growth during positive market conditions, while preserving value by moderating the effect of difficult markets on the downside. The five- and 10-year returns remain strong and demonstrate the prudence of our long-term investment approach.”

According to a statement, CPPIB is building a portfolio and investing in assets designed to generate and maximize long-term, risk-adjusted returns. Accordingly, long-term investment returns are a more appropriate measure of CPPIB’s performance than returns in any given quarter or single fiscal year.

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The CPP Fund’s investment highlights for the quarter, at December 31, 2015, include:

• Jointly acquired Petco with CVC Capital Partners for a total consideration of approximately US$4.6 billion.

• Signed an agreement alongside OMERS and Ontario Teachers’ Pension Plan to acquire Skyway Concession Company for a total consideration of US$2.8 billion.

• Committed to fund approximately 30% of the equity in Altice’s proposed acquisition of Cablevision Systems Corporation, together with funds advised by BC Partners, BC European Capital IX, and other co-investors.

• Signed an agreement through Crestone Peak Resources, a jointly formed entity with The Broe Group, to acquire all of the Denver Julesberg Basin oil and gas assets in Colorado of Encana Oil & Gas (USA), for a total consideration of approximately US$900 million.

Its public market investment highlights for the quarter include:

• Completed a follow-on investment of US$150 million in Markit.

• Invested RMB 3.2 billion (US$500 million) in the common equity of Postal Savings Bank of China (PSBC). 

Its real estate investment highlights for the quarter include:

• Committed an additional US$1 billion to the Goodman China Logistics Partnership, consistent with CPPIB’s 80% ownership interest in GCLP.

• Established a joint venture with Kendall Square Logistics Properties to develop and own a portfolio of institutional-grade, modern logistics assets in South Korea.

• Acquired a 10.6% ownership interest in a diversified portfolio of logistics properties in the U.S. for US$350 million, through a joint venture with Global Logistic Properties Limited and three other global institutional investors.

• Established the Goodman U.K. Logistics Partnership with Goodman Group and APG Asset Management to invest in high-quality U.K. logistics and industrial development opportunities.

The CPP Fund’s asset dispositions during the quarter included:

• The Capital London Fund in which CPPIB is an 80% equity holder, sold 55 Bishopsgate, an office building in London, U.K.

• Sold our 45% indirect stake in 600 Lexington Avenue, a Midtown Manhattan office building.

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