CPPIB's private equity portfolio value drops by $3bn

The $105.5bn Canada Pension Plan Investment Board experienced record losses last year due largely to public equities, though alternative asset classes also suffered.

The Canadian Pension Plan Investment Board lost $17.2 billion for the fiscal year 2009, which ended on 31 March, a loss that included declines of $2.9 billion in private equity, $155 million in infrastructure and $1.1 billion in real estate investments. 

The declines in alternative asset classes were part of an overall loss in the fund’s private investments, which recorded a decline of $5.3 billion for the fiscal year before taking foreign exchange into account, which was negative $3.1 billion when expressed in Canadian dollars.

Canada’s largest single-purpose pension has assets of $105.5 billion, down from $122.7 billion at the end of fiscal year 2007. The fund’s decline “primarily reflects an investment return of negative 18.62 percent or negative $23.6 billion”. Despite the negative overall return, the pension “essentially matched the fund's market-based benchmark”, which was negative 18.63 percent.

“The primary factor affecting the fund’s performance was the sharp decline in global public equity values during the course of the fiscal year,” the investment board said in a statement. “Worsening global economic fundamentals also resulted in lower valuations across the CPP fund’s private equity and real estate holdings.”

The fund has been “rewarded for [its] patience over the past few years with the acquisition and increasing availability of high-quality infrastructure and real estate assets at attractive valuations”, said David Denison, CPPIB president and chief executive. 

CPPIB ended fiscal 2008 with a negative investment return of .29 percent owning to the turbulence in the stock market.