Canada Pension Posts 2.1% Gain as Equities, Bonds Rally

The Canada Pension Plan Investment Board, the country’s second-biggest public pension manager, said investments gained 2.1 percent in the fiscal third quarter as stock and bond markets rallied.

The return for the three months ended Dec. 31 was C$3.2 billion ($3.19 billion), the Toronto-based fund manager said today in a statement. The value of Canada Pension’s assets rose to C$152.8 billion, up from C$152.3 billion on Sept. 30.

“It was a very good quarter for equity markets around the world,” David Denison, the chief executive officer, said in a telephone interview from Toronto. “And bonds continue to do well.”

Canada Pension had a “very busy” busy quarter for transactions, Denison said, and will continue looking for investments and acquisitions around the globe. He said the fund may consider making an offer on Toronto’s Scotia Plaza, Canada’s second-tallest office tower, which Bank of Nova Scotia said last month it may sell.

Canada’s equity benchmark Standard & Poor’s/TSX Composite Index rose 2.9 percent and the MSCI World Index climbed 7.1 percent in the three-month period.

Results trailed the 4.2 percent average increase of assets for Canadian pension funds in the three months, according to a Jan. 23 report by RBC Dexia Investor Services Ltd.

’Global Basis’

Canada Pension had about C$1 billion in net investment income from equities, which represents 51 percent of the fund’s portfolio. Fixed-income investments, which are 32 percent of the portfolio, returned C$1.84 billion, according to financial statements. Real estate, infrastructure and inflation-linked bonds returned C$337 million. The fund had C$2.6 billion in seasonal cash distributions in the quarter.

In the last quarter, Canada Pension agreed to partnerships to invest in a Brazilian shopping mall and a logistics facilities in China, as well as to build an office tower in Toronto for Royal Bank of Canada.

The fund also agreed with partner Ares Management LLC to buy U.S. discount retailer 99 Cents Only Stores, and with Apax Partners Inc. closed a buyout of U.S. wound-care company Kinetic Concepts Inc.

“This is indicative of the kinds of opportunities that we continue to see, and continue to see on a global basis,” Denison said.

Canada Pension covers every Canadian province except Quebec. Caisse de Depot et Placement du Quebec, the country’s largest pension manager, oversees pensions for retirees in the French-speaking province.

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