CPP investment fund earns 5.9% in Q3

The Canada Pension Plan Investment Board earned a 5.9 per cent return on investments it made with the pension contributions it manages in the third quarter ended Dec. 31, it reported on Friday.

The CPP fund had net assets of $201.5 billion at the end of 2013, compared to $192.5 billion the previous quarter.

The investment board has been diversifying internationally and has set up an office in Sao Paulo, Brazil, to manage investments in Latin America and another in New York.

It also has expanded its investments in real estate, infrastructure and private assets with a view to long-term growth, according president Mark Wiseman.

But Wiseman said the boom in equity markets last year was responsible for much of the third-quarter growth. About 32 per cent of its assets are invested in equities listed on public markets and another 18 per cent in private equities.

"The exceptional performance of public equities contributed to the fund’s third quarter results," Wiseman said in a press release.

“Major equity indices attained all-time highs and all of our investment programs delivered significant gains, propelling the fund past $200 billion for the first time."

The CPPIB manages the portion of Canadian Pension Plan funds that are not needed to pay out benefits. At the current rate that Canadians contribute — 9.9 per cent of their pensionable earnings – the CPP is sustainable for the next 75 years according to the chief actuary.

Its investments in the quarter included:

• A portfolio of 115,000 acres of farmland in Saskatchewan.
• Luxury retailer Neiman Marcus, in partnership with Ares Management.
• A 15 per cent stake in European long-term care-provider Orpea S.A.
• Its first real estate venture in India.
• Aldgate House highrise development in London, in partnership with Hermes.
• A 10.4 per cent stake in the largest transporter of natural gas in Peru.
• A 23.8 per cent interest in Altamira Asset Management.