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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 Dallas.

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. —LO

"It's no secret, so I'll say it, but we'll continue the path David set—becoming more global, and continuing to diversify. The global economy will continue to rebalance itself over the coming years."Mark Wiseman, CEO
PUBLIC PENSION PLAN ABOVE $15 BILLION NOMINEES2011 Winner: California State Teachers' Retirement System
  • Teacher Retirement System of Texas (Runner-up)
  • ATP
  • Florida State Board of Administration
  • Massachusetts Pension Reserve Investment Management
  • New Jersey Investment Division
  • State of Wisconsin Investment Board