CPP Fund achieves 8.4% return in 9M period

Of the C$19.7bn increase the Canada Pension Plan Fund achieved in the 9-month ending December 31, C$18.3 billion was net investment income.

The Canada Pension Plan (CPP) Fund saw its assets increase by C$4.4 billion (€3.1 billion; $3.5 billion) in the third quarter and by C$19.7 billion in the first nine months of fiscal year 2015, to reach C$238.8 billion by year-end 2014, the fund’s administrator Canada Pension Plan Investment Board (CPPIB) said in a statement.

The CPP Fund portfolio delivered a gross investment return of 3.3 percent for the quarter and 8.4 percent for the nine-month period.

“The continuing climb in value across most international public equity markets contributed to the Fund’s return this quarter, as did our private investments and fixed income assets,” CPPIB’s president and chief executive Mark Wiseman said in the statement.

“Our globally diversified investments continue to benefit the Fund, providing total portfolio resiliency against significant fluctuations within specific sectors or geographies, such as the rapid decline in oil prices recently.”

To achieve diversification, CPPIB invests the Fund’s assets in public equities, private equities, real estate, infrastructure and fixed income. Of the Fund’s C$238.8 billion portfolio, C$13.2 billion was allocated to infrastructure, representing 5.5 percent of total assets under management.

Returns delivered by the Fund's infrastructure portfolio were not available as they are provided on an annual basis, a CPPIB spokesperson told Infrastructure Investor. Those results will be released in May.

CPPIB’s most recent commitment to the asset class is a A$525 million (€359.8 million; $408.7 million) investment to build and operate NorthConnex, a new tunnel motorway in Australia. CPPIB acquired a 25 percent stake in the A$2.5 billion project, which reached financial close earlier this month.

CPPIB is investing in the public-private partnership (PPP; P3) project, alongside Queensland Investment Corporation (QIC), which also holds a 25 percent stake; and toll road operator Transurban Group, which owns 50 percent.

The nine-kilometre motorway will connect Sydney’s northern suburbs with the Orbital road network and will be the longest road tunnel project in Australia.