CPP ends fiscal quarter on flat note

The Canadian pension plan’s private investments, including infrastructure, helped it from going too far in the red for Q1 FY 2016.

The Canada Pension Plan (CPP) saw an increase of C$4 billion (€2.8 billion; $3.1 billion) in assets under management and a net loss of 0.1 percent, ending the first quarter of fiscal 2016 essentially unchanged compared to the same period last year, the pension fund's investment manager CPP Investment Board , said in a statement.

As of June 30, 2015, total assets under management stood at C$268.6 billion, the result of a net investment loss of C$200 million after all CPPIB costs and C$4.2 billion in net CPP contributions.

“The CPP Fund held steady through the first quarter of fiscal 2016 despite broad declines in major global equity and fixed income markets,” CPPIB president and chief executive Mark Wiseman said. “Amid these difficult market conditions, our private investment programmes generated meaningful income exemplifying the benefits of building a resilient, broadly diversified portfolio,” he added.

The pension fund did not disclose individual returns by asset class. A spokesperson for the organization told Infrastructure Investor it does so only on an annual basis.

CPPIB also announced investments it made during the first quarter, including the acquisition of an additional 8 percent stake in Transportadora de Gas del Peru (TgP), from SK Innovation and Corporación Financiera de Inversiones for approximately $180 million. The transaction, the only infrastructure investment made in the first quarter, makes CPPIB the largest shareholder of TgP with 45 percent of the shares.

The Canadian pension has been steadily building its stake in TgP, the largest natural gas and natural gas liquids transporter in Peru, since it first invested in the company in January 2014, acquiring an initial 10.4 percent stake from construction and engineering company Graña y Montero (GyM), for $200 million.

CPPIB has a diverse infrastructure portfolio, which includes investments in Anglian Water Services (UK), natural gas pipeline company Gassled (Norway) and Highway 407 (Canada). As of June 30, 2015, the portfolio, totaled C$15 billion, accounting for 5.6 percent of its total assets under management.

An investment management organization, CPPIB invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In addition to infrastructure, CPPIB also invests in public equities, private equities, real estate, and fixed-income instruments.