CPPIB grows infra investments by C$3.4bn

The Canadian pension invested C$9.5bn in infrastructure in the quarter to June 30 2011, a close to 36% increase on the C$6.1bn it invested in the asset class during the previous comparable period. Infrastructure now amounts to 6.2% of the pension’s C$153bn portfolio.

Canadian pension fund Canada Pension Plan Investment Board (CPPIB) invested C$9.5 billion (€6.7 billion; $9.6 billion) in infrastructure during the quarter ending June 30, 2011 – its first quarter for fiscal year 2012 – a close to 36 percent increase compared with the C$6.1 billion it invested in the asset class during the previous comparable period.

The increase came thanks to new investments such as CPPIB’s acquisition of a 24.1 percent interest in Norwegian gas transportation business Gassled, to which the pension committed C$738 million in equity. CPPIB invested in Gassled alongside insurer Allianz Capital and sovereign wealth fund Abu Dhabi Investment Corporation.

Infrastructure now accounts for 6.2 percent of CPPIB’s C$153.2 billion portfolio, compared with 4.7 percent during the quarter ended June 30, 2010. Compared with the quarter ended March 31, 2011, CPPIB’s infrastructure investments grew by C$29 million. CPPIB earned returns of 13.3 percent from infrastructure during its last fiscal year, although it declined to specify what returns it had earned during the first quarter of fiscal year 2012.

The pension’s infrastructure allocation is inching closer to its real estate holdings, standing just 2 percent below. CPPIB invested C$12.6 billion in real estate during the quarter ending June 30, 2011, representing 8.2 percent of its total portfolio value. In relation to the previous comparable quarter, CPPIB grew its real estate investments by about 37 percent, or C$4.7 billion. The pension’s real estate investments grew by C$1.77 billion since the quarter ended at March 31, 2011.

The increase comes on the back of several new deals, including a C$339 million investment in a portfolio of 13 malls in New England, US; a C$371 million purchase of a 50 percent stake in a “major shopping and leisure centre located near Dusseldorf, Germany”; and the acquisition of a 50 percent interest in another shopping centre in Melbourne, Australia, for C$470 million.

Private equity still rules CPPIB’s alternative investments roost, with C$24.1 billion invested at the end of its first fiscal quarter for 2012, accounting for 15.7 percent of the pension’s total portfolio. The pension does not provide any information on how its private equity allocation, which is part of its C$79.4 billion equities portfolio, has evolved in relation to the previous comparable quarter.

CPPIB ended the first quarter of fiscal year 2012 with net assets of C$153.2 billion, an increase of $5 billion from the previous quarter ended March 30, 2011.