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Canada Pension Plan sees 3% gross return for third fiscal quarter

18 Feb 2013

canada_lrgInstitutional investment giant the Canada Pension Plan (CPP) had a gross return of three per cent for the quarter ending December 31, 2012 while growing its net assets by $2.5bn.

The pension fund ended the third quarter of its 2013 fiscal year with net assets of $172.6bn according to results released today, thanks to an extra $5bn of investment income and $2.4bn of seasonal cash outflows in the quarter.

CPP said that over the first nine months of the fiscal year it had a gross investment return of 5.5 per cent and $2.4bn in net contributions.

It made a string of direct investments in the fiscal third quarter, including the $6.6bn MBO purchase of Suddenlink Communications alongside BC Partners and the acquisition of Tomkins’ Air Distribution division for $1.1bn.

CPP also completed a debt agreement with iconic motor racing and sports management company Formula One Group to finance $400m of a $1bn private high-yield loan.

Mark Wiseman, president and CEO of the CPP Investment Board, said, “We continued to see solid returns this quarter due to strong increases in global public equity markets and income generated by the portfolio’s private assets. This quarter’s results reflect the strength and capabilities of our diversified global platform, as all investment groups delivered gains.”

Earlier this month it partnered with private equity firms Stone Point Capital and KKR as a joint venture partner and investor in capital markets services company MerchCap Solutions.

CPPIB has a 17 per cent allocation to private equity, both through direct and fund investments.

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