Cash outflow dims growth at CPP
CANADA - The Canada Pension Plan (CPP) reported a growth in assets of C$100m (US$94.7m) for the last three months of 2009 as cash outflow to pay benefits offset strong investment returns.
Net assets increased to C$123.9bn over the quarter, up from C$123.8bn in the previous year. The global stock market rally added C$2.2bn to the plan's investment income during the quarter.
But this was mostly cancelled by an outflow of C$2.1bn to pay the plan's participants.
The fund said there is a seasonal factor where it pays out more cash in the last part of the calendar year.
Its quarterly performance helped the scheme to return 14% in investment income over nine months to end of December. The fund reports annual results at the end of March.
"By staying the course with our long-term strategy and strategic asset weightings, including public equities, the fund has benefited from the rebound in equity markets around the world," said CPP Investment Board president and chief executive officer David Denison.
He said the plan had made three "significant" investments during the quarter within Canada and abroad.
These were in Toronto-based freight and logistics firm Livingston International, research heavyweight IMS Health and the Silverburn shopping centre in Glasgow, one of Scotland's largest retail outlets.
"We are confident these assets will generate long-term value to help sustain the CPP," Denison said.
Earlier this month, the plan allocated C$400m into a private equity fund of funds that will invest in Canadian small-to-mid sized companies. (Global Pensions, February 4, 2010)
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