CPPIB president and chief executive officer John Graham at Intersect 26 in Toronto on Wednesday.Fred Lum/The Globe and Mail
Canada Pension Plan Investment Board chief executive officer John Graham said he is increasingly encouraged that Canada is creating more large-scale opportunities to invest, and the fund is “open for business” to the defence sector as the country ramps up spending on national security.
Mr. Graham said CPPIB, the country’s largest pension fund with $780-billion of assets, has been “curious and interested” to explore new options for investing domestically. Now, “we’re very encouraged on the discussions and the activity that’s starting to happen,” he said at The Globe and Mail’s Intersect 26 event in Toronto on Wednesday.
“We’re starting to see more opportunities. We’re engaged in a handful of processes on big opportunities,” he added, without specifying what those investments might be.
He stopped short of saying whether CPPIB intends to boost the share of its portfolio that is invested in Canada, which stands at 12 per cent, or about $93-billion.
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Blake Hutcheson, the CEO of the $145-billion Ontario Municipal Employees Retirement System, said this week that the fund plans to add $10-billion in additional investment in Canada over the next five years. That would raise the share of its portfolio in Canada to 25 per cent from 18 per cent, and was the first firm target set by one of the country’s major pension funds to boost its domestic exposure.
Mr. Graham said CPPIB’s interest in Canadian investments is broad-based, spanning private assets such as infrastructure and private equity, as well as public stocks and provincial bonds.
He said investing in defence is “on mandate” and that “absolutely, we’ll look at defence opportunities.”
The CEO also said the fund has been “steadfast” in its support for the oil and gas sector, in spite of criticism from environmental advocates, and has also built a renewable-energy portfolio.
As investors rush to back the development of artificial intelligence, Mr. Graham said, CPPIB has backed away from concentrated bets on large technology companies, even though it has at times been “super painful” to watch those share prices surge.
The fund has tried to limit its exposure to AI risks by instead investing in the “picks and shovels” behind new models, such as data centres and the energy to power them.
“Technology can change the world and be overvalued, it can be both,” he said, but “we actually don’t know” whether a bubble is developing.
He stressed that CPPIB will stick to its mandate to maximize investment returns without risking undue losses, wherever those investments may be.
Asked whether there has been explicit or implicit pressure from Ottawa to invest more of CPPIB’s assets in Canada, Mr. Graham said, “Actually, no.”
Finance Minister François-Philippe Champagne was also asked Wednesday whether the federal government would tell pension funds to do more in Canada. He indicated a preference for co-operation.
“I think they see for themselves the attractiveness of Canada, and we’re happy to work with them,” he told reporters in Ottawa.
With a report from Stephanie Levitz in Ottawa