01/07/2008

Canada pension plan investments top $1.5bn

The Canada Pension Plan Investment Board (CPPIB), one of the largest pensions in North America, has so far allocated $1.5bn, or 1.3% of its total portfolio, to absolute return strategies, and plans for more allocations to funds of hedge funds (FoHF) and other strategies for fiscal 2009.

In its annual report released earlier this month, the body that oversees the un-earmarked funds for the country’s national pension scheme reported investments in several fixed-income absolute return strategies, including $225m with Barclays Global Investors, $250m with Pacific Investment Management Company (PIMCO), $315m with Smith Breeden Associates and $100m with Treesdale Partners.

“Fiscal 2009 plans include the addition of more niche-focused fund of hedge funds managers, as well as fundamental managers to complement the quantitative managers already engaged,” the CPP Fund said in its report.

“Rigorous risk measurement systems were deployed in fiscal 2008 that allow the group to view hedge fund risk in the context of the group’s entire active risk."

For its total portfolio, the CPPIB fund ended the fiscal 2008 year on 31 March at $122.7bn, an increase of $6.1bn from $116.6bn at the close of the previous year. The growth consisted of $6.5bn in CPP contributions not required to pay current benefits, partially offset by an investment return of -0.29%, representing negative $303m.

The CPPIB is a federal corporation that manages the not-in-use assets of the Canada Pension Plan, which pays pension benefits to some 17 million Canadians. The Caisse de Depot en Placement du Quebec is a provincial corporation that oversees the pension benefits for residents of the province of Quebec.