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The Canadian Pension Plan Investment Board (CPPIB) reported its largest-ever quarterly net income on Friday as the pension fund manager posted gains through a broad range of investments. <\/p>\n
The fund\u2019s net income for the quarter ending June 30 was $60.2 billion and its net assets increased to $863.6 billion from $793.3 billion in the previous quarter when including $10.1 billion in net transfers from the Canada Pension Plan. <\/p>\n
\u201cWhile a strong quarter is welcome, a single quarter isn\u2019t how we measure success,\u201d CPPIB chief executive John Graham said in a statement on Friday. \u201cOur focus remains on delivering the long-term investment performance required to help sustain the Canada Pension Plan for generations of contributors and beneficiaries.\u201d <\/p>\n
The fund had a quarterly net return of 7.5 per cent, which was the highest since the fourth quarter of 2015. It also generated a 10-year annualized net return of 9.4 per cent. <\/p>\n
The fund\u2019s quarterly growth was due to strong performances in sectors related to artificial intelligence , public equities and the energy sector, as well as an improving investor sentiment in general, CPPIB said. <\/p>\n
Fixed-income investments also contributed to returns, as did foreign exchange movements, primarily from a stronger United States dollar , it said. <\/p>\n
\u201cOur investment portfolio remains well positioned to benefit from favourable public equity market performance, with meaningful contributions across our globally diversified portfolio,\u201d Graham said. <\/p>\n
During the quarter, CPPIB invested US$1.75 billion to support global investment firm EQT AB\u2019s strategy to build AI infrastructure and committed $1 billion to acquire a majority stake in Tarchon Energy\u2019s 1.4-gigawatt subsea and online power link between Germany and the United Kingdom. <\/p>\n
In May, Graham said the Canadian government\u2019s newly created sovereign wealth fund and its openness to the privatization of large assets such as airports could present interesting investment opportunities for Canada\u2019s largest pension fund. <\/p>\n
\u201cAirports, pipelines, other types of infrastructure, these are well-established assets for institutional investors such as us, and we have all those assets in the portfolio today in some form,\u201d he said at the time. \u201cThese are assets that would generate a lot of interest from institutional investors.\u201d <\/p>\n
However, if Ottawa hopes to attract interest from institutional investors such as CPPIB, Graham said it\u2019s crucial for the government to clearly articulate what the investments are intended to \u201csolve\u201d and ensure pensions are given sufficient control. <\/p>\n
\u201cIf you\u2019re coming in with large amounts of capital, you\u2019d want to have some governance rights and ability to control your own destiny,\u201d he said on Thursday. \u201cSo the devil\u2019s in the details. We\u2019re hopeful that this will all get fleshed out in the near term and (we\u2019ll) be able to see some interesting opportunities.\u201d <\/p>\n