Canada Pension Plan Investment Board reported one of its best quarterly gains to close out 2024, earning 3.8 per cent on its investments and boosting the total assets it manages to $700-billion.
The country’s largest pension fund manager added $24.5-billion in assets in the three months that ended Dec. 31 – its third fiscal quarter. CPPIB earned $26-billion in investment profits, and paid out $1.5-billion more in benefits than it collected in contributions.
John Graham, head of Canada Pension Plan Investment Board, gestures during an interview in Sao Paulo, Brazil, in August, 2024.Carla Carniel/Reuters
Over a 10-year period, CPPIB has earned an average annual return of 9.2 per cent.
CPPIB invests on behalf of the Canada Pension Plan, the national retirement plan for working Canadians, which has more than 22 million contributors and beneficiaries.
The fund manager said it reached the $700-billion mark five years faster than the Chief Actuary of Canada had projected in reports published in 2000 and in 2018, in a statement reporting its quarterly results.
The fund added investment income from most asset classes and benefitted from a weak Canadian dollar, as many of its investments are made in U.S. dollars or other currencies that have increased in value in relative terms. Those gains were partly offset by losses on fixed-income assets, where prices fell as yields rose on U.S. Treasuries.
It was one of CPPIB’s best quarters, measured by the increase in total dollars in the portfolio, since the federal government created the fund manager in 1999.
“Our investment teams were very active with more than 40 transactions signed or closed in the last three months of the calendar year,” president and chief executive officer John Graham said in a statement.
Those investments included a US$515-million private equity investment to buy a 24.5-per-cent stake in video game service provider Ireland-based Keywords Studios PLC, and US$180-million in a deal to take Montreal-based payments provider Nuvei Corp. private.
After the fiscal quarter ended, CPPIB also secured a large windfall by announcing it is selling its stake in Texas-based electricity producer Calpine Corp. for cash and stock in Constellation Energy Corp., which is buying Calpine for US$16.4-billion.
With trade wars looming and rising concerns about the impact that could have on economic growth and consumer prices, Mr. Graham acknowledged that investors face “considerable uncertainty on a global scale as 2025 begins.”