TORONTO — The C$81.3 billion (US$64.67 billion) CPP Investment Board is moving into a more dynamic investment phase.
Created six years ago to diversify Canada's pension system away from a government bond-only strategy, the board has, within the last two months:
• Announced plans to increase its allocations to real estate, infrastructure and other real return assets such as real return and inflation-linked bonds;
• Acquired for $1 billion a 50% interest in 11 commercial properties from Oxford Properties Group; and
• Split the real estate portfolio into a separate unit from the private equity and infrastructure unit.
The CPP Investment Board has 56.2% in stocks, 39% in fixed income, 3.6% in private equity and 1.2% in real estate and infrastructure. One of the key priorities in the board's 2006 business plan is to increase the proportion of its portfolio invested in real return assets, which include real estate and infrastructure. Currently, 1% of the portfolio is invested in such investments. CPP officials would not give specifics of the new business plan, but spokesman Ian Dale said they expect to invest 10% of fund assets in infrastructure and 10% in real estate over time within the next 10 years.
Mark Wiseman, vice president in charge of the private equity and infrastructure portfolio, which has commitments of C$8.5 billion, is developing the CPP Investment Board's private equity and infrastructure strategies. He joined the board last month from the C$85 billion Ontario Teachers' Pension Plan, Toronto, where he was vice president of funds and co-investments in charge of that fund's C$5 billion private equity portfolio.
"The organization is clearly moving to the next level across asset classes, becoming more involved in active management," Mr. Wiseman said in an interview. "I think that (separating real estate from private equity and infrastructure) is just a logical process of maturation. As we move to active management, we need more specialization."