Pension Pulse

Caisse de dépôt et placement du Québec (CDPQ) has acquired a 45% stake in DP World Chile, which operates terminals in Puerto Central and Puerto Lirquen, serving Chilean consumption and industrial centers. This is CDPQ's first infrastructure investment in Chile and the transaction will be executed at the same price as DP World’s acquisition of the asset in April 2019: Two years ago, CDPQ partnered with DP World to create a US$3.7-billion platform to invest in ports and terminals globally. DP World holds 55% of the platform and CDPQ holds the remaining 45%. The two new assets in Chile join a portfolio of ports, which includes terminals in Vancouver and Prince Rupert in Canada, that are already owned by the platform. “This is our first infrastructure acquisition in Chile and our first Latin American ports. It marks an important step in the growth of our platform with DP World and aligns well with its geographic diversification objective,” stated Emmanuel Jaclot, Executive Vice...

Today, the Canada Pension Plan Investment Board (CPPIB) reported impressive results for fiscal year 2019. It achieved a 10-year and five-year annualized net nominal returns of 11.1% and 10.7%, respectively. The Fund returned 8.9% net of all costs: “CPPIB continues to deliver strong absolute and relative returns, and our robust 10-year performance demonstrates our long-term contribution to the sustainability of the CPP,” says Mark Machin, President & Chief Executive Officer, CPPIB. “We have gradually built a diversified, global investment platform and focused on executing our multi-year strategy – these are key drivers of our financial performance and our future success.” Fiscal 2019 brought on a range of market conditions, including a public equity market downturn in December, which was bookended by rising equity markets at the beginning and end of the period. CPPIB’s portfolio management strategy benefits from ascending public equity markets, while alternative assets and o...

At the SALT conference last week, John Graham, senior managing director and global head of credit investments at CPPIB, said that the growth story in emerging markets is compelling : “Up to one-third of the Fund is set to be invested in emerging markets” he said. “We’re playing the long game.” Approximately 20% of the pension’s portfolio is currently in emerging market investments. Graham highlighted the growth opportunities in China, noting that rule of law has improved. “The legal framework in many emerging markets is getting better,” he said. “The courts in Shanghai and Beijing are actually very good.” According to Graham, emerging markets are not only more mature and resilient than they once were, the growth of their consumer classes is likely to continue even if the developed economies start to show signs of weakness. Emerging market economies are also taking steps to become more investor and creditor friendly, in contrast to trends in some developed economies. “There ar...

Today, the Caisse de depot et placement du Quebec (CDPQ) announced a loan of $260 million or £150 million to Lightsource BP, whose major stakeholder is British Petroleum (BP): The facility will initially be used to finance a diversified portfolio composed of over 100 solar projects located across various countries and totalling more than 700 MW. Over time, the facility could expand with further investment from CDPQ funding assets developed through the Lightsource BP pipeline. This partnership aligns perfectly with CDPQ’s investment strategy in addressing climate change through low-carbon investments. Alongside Lightsource BP, it invests in solar projects, an asset class that will continue playing a key role across the energy transition landscape. Founded in 2010, Lightsource BP has established operations across EMEA, APAC and the Americas, supported by an in-house team of over 350 specialists. With over 2 GW of solar capacity currently under management, Lightsource BP’s ambit...

CNBC reports stocks staged a massive reversal on Friday after President Donald Trump said conversations with China over trade will continue and his relationship with President Xi Jinping remains strong: The Dow Jones Industrial Average finished the day 114.01 points higher at 25,942.37, roaring back from a 358-point loss earlier in the session that came in the wake of a tariff increase by the U.S. effective just after midnight. The S&P 500 snapped a four-day losing streak, eking out a 0.37% gain at 2,881.40. The Nasdaq Composite ended the day slightly higher at 7,916.94 after stocks rallied from their lows. Stocks hit session highs after Trump’s late Friday tweet and closed near those levels. The president also noted that the trade talks with China were “candid and constructive.” Trump said the new tariffs on $200 billion worth of Chinese goods “may or may not be removed” in the future. Over the course of the past two days, the United States and China have held candid a...

Radical Ventures, a Canadian venture capital firm focused on artificial intelligence (AI), has launched a new fund with a target of about $470 million (US$350 million). Cornerstone LPs include Canada Pension Plan Investment Board (CPPIB), the Public Sector Pension Investment Board (PSP Investments), TD Bank Group and Wittington Investments, Limited: “AI is perhaps the most disruptive technology since electricity. It will transform the world, impacting everyone, and we are just at the beginning of its application,” said Jordan Jacobs, Managing Partner, Radical Ventures. “Toronto and Canada have led the world in developing AI that is disrupting industries from healthcare to finance to smart cities and everything in between. We are now seeing an explosion of AI startups in Toronto, across Canada and globally. Radical aims to back the most ambitious founders seeking to make a positive impact on the world.” Jacobs previously co-founded and was co-CEO of Layer 6, a world-leading AI ...

The Financial Post reports that SNC-Lavalin's proposed sale of 10 per cent of the 407 to the Ontario Municipal Employees Retirement System (OMERS) for $3.25 billion precludes the possibility of a bidding war and also puts the company on the hook for a sizable breakup fee if the deal falls apart: SNC-Lavalin currently owns 16.77 per cent of the 407 and proposed in April to sell 10.01 per cent to OMERS, with $3 billion due when the deal closes in June, and as much as $250 million in payments over the next decade depending on toll revenues. But the road’s other owners, subsidiaries of Canada Pension Plan Investment Board and the Spanish firm Ferrovial SA, may exercise a right to match OMERS’ offer, which would force SNC-Lavalin to pay about $75 million to OMERS. Either way, SNC-Lavalin’s chief executive Neil Bruce assured investors the sale would close in June, and provide enough cash to reduce the company’s recourse and limited recourse debt of roughly $3 billio...

Swaraj Singh Dhanjal of livemint reports that Piramal Enterprises has signed an agreement with CPPIB to co-sponsor India’s first renewable energy-focused infrastructure investment trust (InvIT): The proposed InvIT will have an initial targeted corpus of up to $600 million with an option to scale up further, Piramal said in a regulatory filing. CPPIB and Piramal will initially allocate $360 million and $90 million, respectively, to the corpus. The InvIT would seek to acquire up to 1.5-2 gigawatts (GW) of stable and long-term cash-generating renewable assets, with a firm focus on diversification of clients of both solar and wind assets as well as the customers of the electricity. “We are pleased to partner with CPPIB on the launch of the first-ever InvIT in India, focused on renewables. The foundation of this partnership is based on a shared ethos and values that leverage CPPIB’s global track record of value creation in the infrastructure space with Piramal Enterprises’ long-te...

Bloomberg reports that Harvard endowment’s CEO N.P. “Narv” Narvekar is doubling down on hedge funds : Narvekar’s bet on the sophisticated, high-cost brand of money manager marks the biggest since the university hired him in 2016 to turn around the lagging performance of its $39 billion endowment. Over the two years ended in June, the largest fund in higher education almost doubled its investment in hedge funds, which now total $13 billion, university filings show. Harvard’s hedge funds comprise a third of the endowment, compared with roughly a quarter at Yale and Princeton. Hedge funds have had years of uneven or poor performance during a long bull market that has favored low-cost investing in market indexes. Their returns and fees -- traditionally 2 percent of assets and 20 percent of profits --- have frustrated many other institutions. A third of U.S. endowments and foundations anticipate allocating less to hedge funds this year, according to a survey last month by c...