Public Pension Plan Above $15 BillionCanada Pension Plan Investment BoardToronto, Ontario
What is the Canada Pension Plan Investment Board (CPPIB) doing that is so innovative?
Everything—with an investment team of 341, total staff of 811, offices in three far-flung cities
(Toronto, London, and Hong Kong), and $165 billion in assets under management, CPPIB
runs a full-service shop. Its 10-year annualized returns of 6.3% demonstrate the senior staff's
success at managing this behemoth.
And it's only getting bigger: the CPPIB is the seventh-largest pension fund globally, and one
of the fastest-growing pools of assets anywhere. But while these qualities set the fund apart
in some ways, the staff engages closely with their peers at other funds. "We do think there is
a lot to learn from our global peers," says CPPIB's Chief Executive Officer Mark Wiseman.
"We spend a lot of time talking to other public pension plans and sovereign funds because
they are similarly placed. We're looking to learn best practices in terms of asset management,
allocation, risk management, and general internal processes. Like with the managers we
work with, our interests are largely aligned with these other institutions." Furthermore, the
dialogue flows both ways. Fellow Class of 2012 member New Zealand Superannuation
(winner in the Sovereign Wealth category) looked to CPPIB when planning its organization
overhaul, and cites the fund as a role model.
Likewise, the relationships between the fund and its investment management partners are
unusually balanced, according to Wiseman. "One thing we don't do is look for special rights,
or special terms, when working with private-equity firms and others in co-investments. We
want to make it a true partnership, not an agency relationship." Silver Lake, TPG, and
Canadian private-equity shop Onex are among the fund's partners. "We want to provide large
sums of capital along with our internal experts, and combine that with the capital from these
firms and their expertise," he says. To give a sense of these deals' scale: A number of
partnerships and joint ventures have spawned simply massive real estate plays. The fund
recently teamed with Lend Lease Corp., investing $2 billion to develop and maintain two
office towers. In July, the Canadian fund announced it was delving further into US real estate
with a $355 million investment into residential properties in San Francisco, Chicago, and
If CPPIB's deal-making sounds more like a corporate developer than a pension fund, that's
intentional. Eric Wetlaufer, the head of public market investments, describes CPPIB as "an
investment management organization that's run like a commercial operation. " Because of
that, he says, it has "the opportunity to partner with some of the smartest people on Earth." It
takes one to know one, we guess. —LOSEE DATA