Canada Pension Plan Investment Board, the country’s largest pension fund manager, posted its best performance for a single year in the 12 months through March.
The fund said its investments yielded a net return of 18.3 percent in the period. Chief Executive Officer Mark Wiseman said his team continues to look for select opportunities in emerging markets and to capitalize on the continued weakness of oil prices.
High valuations and stiff competition continues to slow deal flow, with Canada Pension closing fewer deals last year than it did the year before, he said.
“We continue to tread very carefully,” Wiseman said in an interview. “It’s not to say we don’t see opportunities out there. But you really have to pick your spots.”
Assets under management at the Toronto-based pension fund increased 21 percent to about C$265 billion ($217 billion) in the year through March. The gains came amid growth in all major equity markets, bonds, private assets and real estate holdings, according to a statement Thursday.
Canada Pension, which oversees the retirement savings of 18 million Canadians, invests with a longer-term horizon that lets it make riskier bets than other investors might, Wiseman said.
International markets, both emerging and developed, advanced significantly as well, helping drive returns last year.
Wiseman said the pension fund was quite active in its Brazil office, looking for investments given the embattled economy there and the fall out from the Petrobras Brasilerio SA scandal.
“There will be buying opportunities in Brazil,” he said.
Other high-growth markets, like India and China, are exciting opportunities, he said.
Private investments in emerging-market equities led all segments, returning 47 percent during the year. Private investments in oversees developed-market equities rose 30 percent from the year earlier.
Wiseman said the drop in energy prices was also creating opportunities for investment.
Canada Pension said it completed 40 transactions during the fiscal year, of more than C$200 million each, in 15 countries around the globe. Those deals included a commitment with Hermes Infrastructure to invest about C$3 billion for a 33 percent stake in Associated British Ports, and a C$500 million commitment to build and operate a new tunneled motorway in Sydney.
Earlier this week, BC Partners Ltd. and Canada Pension sold a 70 percent stake in Suddenlink, the seventh-largest cable operator in the U.S., to Altice SA in a deal that gave Suddenlink an enterprise value of $9.1 billion.
It also agreed to acquire D-Cube Retail Mall in Seoul, South Korea, with its partner GIC Pte Ltd. for $263 million.