CANADA - The Canadian Pension Plan (CPP) Investment Board has defended its decision to invest in asset backed commercial paper (ABCP) and cited market confusion as an opportunity to make money.
A statement from CPP said: "Current market conditions present good opportunities to purchase high-quality, bank-sponsored fixed income securities at an attractive yield to earn risk-adjusted returns.
"The opportunity stems from confusion in the marketplace between high-quality bank-sponsored ABCP and significantly lower-quality non bank-sponsored ABCP."
The C$121bn (US$121bn) fund announced that as of mid-December it held C$6bn (US$6bn) in the vehicle.
Non-bank sponsored ABCP hit the news recently as assets were frozen and became the subject of the Montreal Accord negations calling for better regulation of the class.
CPP actively emphasised the difference between the two classes of investment, covering the different areas of debt in which they invested and levels of leverage.
At the end of November, compatriot investor La Caisse de Depot et Placement du Quebec announced it had made a potential C$500m (US$500m) write down due to its holdings in sub-prime ABCP.
This week's top stories included Cardano announcing plans to acquire Now Pensions from a Dutch pension fund later this year.
Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point