CPPIB posts small 0.1% gain in second quarter as assets climb

Canada Pension Plan Investment Board earned 0.1 per cent on its investments in its fiscal second quarter, adding $1-billion to its total assets as the fund manager navigates volatile markets.

CPPIB edged back into positive returns after it lost 0.8 per cent in its fiscal first quarter, and generally outperformed public stock and bond markets that fell over the same period.

Canadian pension plans had a median loss of 3.7 per cent in the quarter, which ended Sept. 30, as measured by data from the Northern Trust Canada Universe.

The return over 10 years for CPPIB’s investments, which the fund considers a better measure of its long-term performance, edged down to 9.6 per cent, from 9.8 per cent last fiscal quarter.

Chief executive officer John Graham said in a statement that CPPIB’s portfolio “remains resilient,” but added: “We expect these challenging investing conditions to persist for the near term.”

CPPIB’s quarterly investing results were bolstered by gains from credit and private equity assets, as well as assets denominated in U.S. dollars, which strengthened relative to the Canadian dollar.

Those returns were largely offset by CPPIB’s public-market portfolios as bonds continued to be pummeled by high interest rates and stock markets retreated.

More than half of CPPIB’s total assets are invested in private assets such as private equity, infrastructure, real estate and credit, which have held more steady valuations through volatile markets, and helped blunt some of the swings in public markets as interest rates rose rapidly.

Total CPPIB assets are $576-billion, compared with $575-billion three months earlier, as CPPIB added $488-million of investment gains and $700-million of net transfers from the Canada Pension Plan.

The CPP, launched in 1966, is the primary national retirement program for working Canadians, and CPPIB has managed its funds since 1999.

During the quarter, CPPIB named current board director Dean Connor, the former CEO of Sun Life Financial, as its new board chair, succeeding Heather Munroe-Blum. The pension fund manager also added former Rogers Communications Inc. CEO Nadir Mohamed to its board.