CPPIB private equity assets hit $14bn

Private equity now makes up 11 percent of the Canadian pension’s capital under management, which has grown to nearly $128bn. The CPPIB has narrowly bucked the loss-making trend among North American pension funds, recording a 1 percent total return on investments in the three months ended in June.

The Canada Pension Plan Investment Board’s private equity portfolio reached $14.1 billion, or 11 percent of total assets under management as of 30 June.

Private equity assets stood at $8.6 billion 12 months prior, making up 7.2 percent of assets under management. 

During the three months to June this year, CPPIB’s total assets have grown by $5 billion thanks in part to higher commodity prices and energy stocks. Despite pension plans across the US reporting losses owing to declining equities markets, CPPIB has seen returns on its investments rise by 1 percent pushing the total value of the fund to $127.7 billion.

According to the pension, the $5 billion increase was made up of $1.3 billion in investment income, equivalent to a 1 percent IRR, and $3.8 billion in pension contributions not directed to current pension beneficiaries.

Canadian equity markets had risen 8.6 percent owing to higher commodity prices and energy stocks offsetting a 3.4 percent decline in other markets due to the continuing credit dislocation, CPPIB president and chief executive David Denison said in a statement.

Equities comprised 62 percent, or $79.2 billion, of the fund as of the end of the first quarter for the fiscal year 2009 (30 June 2008), with 51 percent focused on public equities and 25.8 percent on fixed income.

Meanwhile real estate totaled 5.6 percent, or $7.2 billion in value, and infrastructure accounted for 2.6 percent of the pension’s portfolio, with a value of $3.3 billion.

The California State Teachers' Retirement System and neighboring pension, California Public Employees’ Retirement System, both recently reported losses on investments of 3.7 percent and 2.4 percent respectively, despite healthy returns from private equity.

In Europe, the Canadian pension has opened an office in London to target deals in the infrastructure, private equity and real estate asset classes. Former Goldman Sachs deal-maker Alain Carrier heads the pension’s private equity and infrastructure activities in London. It follows CPPIB’s opening of a Hong Kong office in February.