Canada Pension Plan Investment Board, Toronto, will start searches for outside equity managers early next year, now that it has full discretion over its C$11 billion (US$7 billion) domestic equity portfolio, according to John MacNaughton, president and CEO.
New regulations published late last month by the federal government give the board full discretion over the investment policy for that portfolio. The plan also has C$42 billion in bonds and cash. The total portfolio is managed now by TD Quantitative Capital.
Previously the board had to have 50% of domestic equities invested passively, benchmarked to the Toronto Stock Exchange 300 index. As a result, the board had a huge exposure to Nortel Networks Corp. stock, whose value nose-dived last year.
Partly because of that, the CPP board had a C$852 million loss in the fiscal year ended March 31.