CPP allocates nearly $3bn in alts strategies in Q4

The C$475.7 billion ($374 billion) Canadian Pension Plan Investment Board (CPP Investments) announced its final quarter of 2020 results this week, including the investment of roughly $3 billion of alternative investment activity going into yearend. The pension system saw significant asset growth over the quarter, totaling a gain of C$19 billion in net assets. Overall, CPP has C$120 billion in private equity, C$62 billion in credit and C$99 billion in real assets, including real estate. The largest alternative investment allocation was in the real assets portfolio and the acquisition of a 15% interest in toll-road business Transurban Chesapeake for $624 million was one of five large deals. This was a transaction alongside other investors that together will make up a 50% stake in the company. CPP also formed a new joint venture with Greystar Real Estate Partners to pursue multifamily real estate development opportunities in target markets in the U.S. CPP took on an equity allocation of $350 million for a 90% stake in the joint venture. The pension fund staff also established a new Indonesia venture to invest $200 million to acquire and develop a portfolio of institutional-grade facilities with logistics real estate specialist LOGOS. Renewable Power Capital received €245 million ($297 million) to support the firm’s acquisition of onshore wind projects in Finland. Another acquisition totaled $625 million in Hudson Pacific Properties through a 45%/55% joint venture. Lastly, within the real asset portfolio was an additional £300 million ($414 million) of equity to investment vehicles in the U.K. targeting the logistics sector alongside Goodman Group and APG Asset Management. Within the credit portfolio, CPP committed $125 million as a cornerstone investor to Baring Private Equity Asia’s India Credit Fund III, and to a Fund III overflow vehicle. The fund’s strategy is focused on secured lending to performing mid-market Indian companies. Also in India, a $98 million commitment to a bilateral financing transaction to support an investment by India-based JSW Projects Ltd. in BMM Ispat, an iron ore pellets producer in southern India. The fourth quarter in private equity was a busy one too with a $160 million commitment in CITIC aiBank, an online consumer finance bank in China. Performance across the investment portfolio remains strong. For the nine-month period through December 2020, CPP returned 16.4% net. According to Mark Machin, president and CEO of CPP, a number of factors led to the fund’s overall strong performance during the fourth quarter, including soaring equity markets that led the way. "Despite the ongoing challenges caused by the global pandemic, all of our teams continue to collaborate seamlessly across the enterprise to achieve strong results,” said Machin. “The commitment to operational excellence among all our employees is critical in seizing opportunities to create long-term value for the fund. The long-term results are the most important for the fund and we are pleased to be sustaining double-digit 10-year returns."

Continue Reading With a Free Trial

Be an Alts Watcher

Subscribe to our mailing list and know first!

Rising precious metals prices offers unique HF trade

Slate to lean on data science, machine learning with new hire

Related Articles

MassPRIM plots $18bn diverse asset manager program

Yale’s Swensen remembered as an alternative investing pioneer

Preparing your hedge fund for the modern cybercriminal

Barometer Capital launches Canadian music rights fund

Get our daily news digest in your inbox

Get our daily news digest
in your inbox