CANADA - The Canada Pension Plan (CPP) returned 1.2% for the second quarter of the year, with the strength of fixed income offsetting poor performance across other portfolios.
The CPP Investment Board said the reserve fund grew to CAN$75.2bn, up from CAN$73.2bn in the three months ending September 30, due to investment earnings of CAN$906m and CAN$1.1bn in contributions paid.
The return of negative 0.02% posted by the equities, real estate and infrastructure portfolios was offset by a 2.2% return on the fixed income portfolio.
Commenting on the results, CPP Board president and CEO John MacNaughton said: “Our focus remains on the long term. We are continuing to broadly diversify the portfolio in order to help ensure sustainability of the CPP for generations to come.”
At September 30, 2004, the CPP’s assets consisted of CAN$35.6bn in bonds and money market securities and CAN$39.6bn in publicly traded stocks, private equities, real estate and infrastructure.
Meanwhile, the Board has committed CAN$50m to a Canadian venture capital fund – EdgeStone Venture Fund II – which will look to invest in early-stage software companies in enterprise solutions, transaction processing and networking.
“We continue to seek investment opportunities in Canadian venture capital as part of our portfolio diversification strategy,” MacNaughton said.
“We believe such investments will generate superior long-term returns.”
The latest commitment brings the total amount allocated by the CPP to Canadian private equity funds to CAN$1.5bn, including CAN$550m to Canadian venture capital.
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