The Canada Pension Plan Investment Board, Toronto, reported an investment gain of 3% in its fiscal third quarter as stock markets rose.
Investment income for the three months ended Dec. 31 was C$3.9 billion (US$3.92 billion), according to a statement released Thursday. Assets rose to C$140.1 billion, from C$138.6 billion on Sept. 30.
“Public equity markets have been the key driver,” David Denison, president and CEO, said in an interview. It “was a very solid quarter for Canadian equity markets and really all international markets.”
Returns in the period were partly offset by cash outflows of C$2.4 billion to pay benefits.
The board had a five-year annualized return rate of 3.5%, and a 10-year rate of 5.6%.
CPPIB’s performance missed the average 4.3% return for the country’s pension funds, according to a January report by RBC Dexia Investor Services.
The board will pursue more private equity deals, including real estate transactions, this year, Mr. Denison said.
Private equity deals are likely to increase in 2011 as debt markets improve and availability of financing improves, he said. Opportunities to invest in real estate may also surge as “an incredible amount” of real estate debt financing matures this year through 2013, he said.
“We’re very focused on the major real estate markets,” Mr. Denison said. That includes the U.S., U.K., Europe, Australia and some emerging markets including China and Brazil.