CPP Fund reports $298.1B net assets

Ted Liu

Canada Pension Plan Investment Board (CPPIB) reported that net assets of $298.1 billion for the CPP Fund ended its third quarter of fiscal 2017 on December 31, 2016, comparing to $300.5 billion at the end of the previous quarter.

The $2.4 billion decrease in assets for the quarter consisted of $1.7 billion in net investment income after all CPPIB costs, less $4.1 billion in Canada Pension Plan (CPP) cash outflows. The CPP Fund routinely receives more CPP contributions than required to pay benefits during the first part of the calendar year, partially offset by payments exceeding contributions in the final months. The Fund continues to benefit from net contributions on an annual basis after all outflows.

CPP portfolio delivered a gross investment return of 0.64% for the quarter, or 0.56% net of all costs.

For the nine-month fiscal year-to-date period, the CPP Fund increased by $19.2 billion from $278.9 billion at March 31, 2016. This included $19.4 billion in net investment income after all CPPIB costs, less $0.2 billion in net CPP cash outflows. The portfolio delivered a gross investment return of 7.1% for this period, or 6.9% net of all costs.

CPP Funds asset mix as of December 31, 2016: public equities (34.8%), private equity (21.2%), fixed income (22.1%), Real Estate (12.6%) and Infrastructure (9.3%).

CPPIB reported that in Q1, 2017 following the quarter end, it made two transactions with its partner private equity funds.

  • US $80 million for a 23% equity stake in Accordia Golf, the leading golf course operator in Japan. The investment was made alongside MBK Partners, as part of their acquisition of Accordia Golf.
  • Signed an agreement to acquire an approximate 48% stake in GlobalLogic Inc., a global leader in digital product development services, from funds advised by Apax Partners LLP.

CPPIB is a significant LP in MBK Partners Funds, having committed US $200 million to MBK II in 2008, US $300 million to MBK III in 2012, a significant amount to MBK IV, a US $4 billion fund closed in 2016. CPPIB committed €200 million to Apax VI in 2004, €500 million to Apax VII in 2007, €350 million to Apax VIII in 2012 and US $500 million to Apax IX in 2016