BUSINESS

Canada Pension Plan Swings To A Loss After Record-Breaking Profits Last Year

08/14/2015 03:01 EDT | Updated 08/14/2016 05:59 EDT
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TORONTO — The CPP Fund had a small investment loss in its most recent quarter but the retirement fund's assets increased by $4 billion overall because of contributions from the Canada Pension Plan.

The Canada Pension Plan Investment Board says the CPP Fund had $268.6 billion of net assets as of June 30, up from $264.6 billion a year earlier.

It received $4.2 billion in contributions from employees and employers covered by the Canada Pension Plan but that was offset by $200 million in net investment losses after costs.

It says the portfolio's gross investment return was flat for the quarter and negative 0.1 per cent on a net basis.

That contrasted with the fund's return for the 2014-15 financial year, which was a record 18.3 per cent.

The three months from April to June was a busy quarter for CPPIB which did more than 25 investments, including several that were worth more than a billion of dollars.

"We continue to assess and seize opportunities that fit our disciplined approach to produce long-term risk-adjusted returns,” CPPIB chief executive Mark Wiseman said in a statement when CPPIB released its 2016 first-quarter financial results. 

Among the biggest deals during the quarter was the acquisition of the Antares Capital lending operation from the financial arm of General Electric, for $12-billion.

Antares Capital's management and about 300 employees will operate the business as a stand-alone, independent lender to private-equity sponsors, subject to regulatory approval.

CPPIB announced in May that it would invest more than $1 billion in a German real estate joint venture. That included $542 million for a 46.1 per cent interest in shopping centre operator mfi AG, and an additional $503 million to support mfi's needs.

In April, CPPIB joined with private equtiy firm Permira to buy Informatica Corp. for about US$5.3 billion. The California-based company has about 5,500 employees who serve organizations with large-scale information assets.

To support its investment activity, subsidiary CPPIB Capital Inc. placed $1 billion worth of five-year notes and the fund manager sold some assets, including US$1.16 billion in cash and notes for a stake in U.S. cable operator Suddenlink.

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