CANADA - The Canada Pension Plan reported a 6.6% return on its investments in Q2 on the back of strong performance by global equities.
The fund ended the second quarter at C$138.6bn ($138.5bn) , compared with C$129.7bn at the end of Q1. The C$8.9bn increase in assets after operating expenses was the result of investment income of C$8.4bn combined with an inflow of contributions totalling C$500m.
For the six month fiscal year-to-date period, the fund increased by C$11bn from C$127.6bn at March 31, 2010. This increase in assets after operating expenses was comprised of C$6.7bn in investment income representing a 5.2% rate of return combined with contributions of C$4.3bn, the fund said.
"All major equity market indices realised gains this quarter, in particular US markets, which posted their best September results in 70 years," said CPP Investment Board President and CEO David Denison.
For the five-year period ended September 30, 2010, the CPP fund generated an annualised investment rate of return of 3.4% (C$18.3bn) on investment income and C$44bn over 10 years, reflecting an annualised rate of return of 5.5%.
In nominal dollar terms, equities represented C$73.8bn (53.2%) of the investment portfolio, consisting of public equities valued at C$53.5bn (38.6%) and private equities valued at C$20.3bn or (14.6%).
Fixed income, including bonds, money market securities, other debt and debt financing liabilities, represented C$45.3bn (32.7%) while inflation-sensitive assets represented C$19.6bn (14.1%). Those assets consisted of: real estate valued at C$9.1bn (6.5%), infrastructure valued at C$6.2bn (4.5%) and inflation-linked bonds valued at C$4.3bn (3.1%).
Over the quarter, CPPIB completed the acquisition of Tomkins plc alongside Onex Corporation (Global Pensions: 31 August 2010) , made investments in eight regional shopping malls in Canada, an investment in Australia's Colonial First State Global Asset Management Property Retail Partnership and a joint venture with UK property manager and developer Hammerson plc to acquire 10 Gresham Street, an office building in the City of London. (Global Pensions: 04 August 2010)
CPPIB has also announced a joint venture with US REIT Vornado Realty Trust to invest in two prime office buildings in Washington, DC and the acquisition alongside LaSalle Investment Management of Hürth Park Shopping Centre, CPPIB's first direct real estate investment in Germany. (Global Pensions: 01 November 2010)
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