Canada Pension Assets Grow to $204 Billion With Weak Loonie

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  • Fund's investments included Petco, Cablevision, Skyway
  • CEO says gains made even with mixed results in fixed income

Canada Pension Plan Investment Board posted a 4.6 percent gross return in the fiscal third quarter as the value of its foreign holdings were bolstered by a declining currency.

Assets under management at the country’s largest pension fund grew 18 percent to C$282.6 billion ($203.5 billion) during the quarter ended Dec. 31, up from about C$239 billion a year earlier, according to results released Wednesday. The fund returned 6.3 percent for the first nine months of the year.

"The returns you are seeing in terms of foreign equities in large measure is due to the weakness in the Canadian dollar," Mark Wiseman, Canada Pension chief executive officer, said in an interview.

As a result, the value of the fund’s total private and public equity portfolios grew more than 15 percent year over year during the quarter, boosted by those in emerging markets that were up 34 percent year over year, according to the fund’s quarterly results.

Canada Pension’s fixed income portfolio grew 28 percent in value compared with the same period a year earlier, and the real estate and infrastructure assets increased 45 percent. By contrast, the value of the fund’s Canadian equity holdings fell 23 percent.

Investment Opportunities

"Clearly, a material positive impact on our returns was the fact we were broadly diversified in terms of the currency holdings of the fund," said Wiseman, adding the current market turmoil is creating investment opportunities around the world, in countries such as China, India and South America and in embattled sectors like natural resources.

"It is times like these with the current market volatility, while it creates uncertainty in the portfolio, it actually creates tremendous investment opportunity for long-term investors like CPPIB," he said. "It’s a very fertile investment environment for us."

In the quarter ended Dec. 31, Canada Pension agreed to jointly buy Petco Animal Supplies Inc., a supplier of premium pet food, with CVC Capital Partners for $4.6 billion.

It also committed $400 million to help fund Altice NV’s acquisition of U.S. cable operator Cablevision Systems Corp., and joined two other Canadian pension funds to acquire Chicago’s Skyway Concession Company, which operates and maintains the Skyway toll road in the city, for $2.8 billion.

Canada Pension is part of a consortium led by Qube Holdings Ltd. that made a sweetened bid for Australian port and rail operator Asciano Ltd. valued at A$9 billion ($6.4 billion).

Brookfield Asset Management Ltd., Canada’s largest alternative asset manager, has a rival bid in place for Asciano.

Canada Pension oversees the retirement savings of 19 million people in the country.