CPP Investments F2023 Results

Summary

John Graham discusses the resilience of the CPP fund amidst global challenges like the war in Ukraine, inflation, and high interest rates. Despite market declines, the fund achieved a 10-year annualized net return of 10% and reached $570 billion in assets. The CPP fund's active management strategy and commitment to sustainability, including a net-zero target by 2050, are highlighted. Investments in diverse sectors like energy, retail, and hospitality are mentioned, showcasing the fund's adaptability and long-term growth focus.

Takeaways

• 🌍 The world has experienced significant changes, including ongoing war in Ukraine, geopolitical tensions, high inflation, and rising interest rates.
• 🇨🇦 Despite challenges, the Canadian Pension Plan (CPP) fund remains resilient and strong, thanks to a prudent investment strategy.
• 📈 The CPP fund has produced solid results, with a 10-year annualized net return of 10 percent, showcasing its ability to create value for future generations.
• 💹 The CPP fund's net assets grew by $31 billion this year, reaching $570 billion, with a 1.3 percent return after expenses, even amidst a decline in global markets.
• 🔄 The fund's active management strategy, with diverse investments across continents and asset classes, has allowed it to outperform most major indexes.
• 🌱 Sustainability is a priority, with the CPP fund committing to net-zero emissions by 2050 and achieving carbon neutrality in its global operations.
• 📊 The Chief Actuary of Canada's financial review confirms that current benefit levels are sustainable for at least the next 75 years at the existing contribution rates.
• 📈 Recent investments include Era Energy in California, D1 in Colombia, and a joint venture in the European hospitality sector, demonstrating a focus on growth and sustainability.
• 🤝 The CPP fund's success is attributed to its people, who embody the guiding principles of integrity, partnership, and high performance.
• 🔮 Looking ahead, market volatility is expected to continue, but the CPP fund is well-prepared to navigate through challenging economic cycles.

Q & A

What are the current challenges mentioned in the global context that have affected financial markets?

The challenges include the ongoing effects of the war in Ukraine, high geopolitical tensions, high inflation, and rising interest rates.

How has the CPP fund maintained its resilience and strength despite these challenges?

The CPP fund has maintained its resilience through a prudent investment strategy designed to create value for generations, with active management seeking the best investment opportunities globally.

What is the role of the Chief Actuary of Canada in relation to the CPP fund?

The Chief Actuary of Canada conducts a financial review of the CPP every three years to evaluate its financial sustainability.

What was the conclusion of the latest financial review of the CPP fund?

The latest review concluded that existing benefit levels are sustainable at current contribution rates for at least the next 75 years.

What was the 10-year annualized net return achieved by the CPP fund?

The CPP fund achieved a 10-year annualized net return of 10 percent.

How much did the CPP fund grow this year, and what was its net asset value?

This year, the CPP fund grew by 31 billion to reach 570 billion in net assets.

What was the return on investment after all expenses for the CPP fund this year?

The CPP fund earned a 1.3 percent return after all expenses.

How has the CPP fund's active management strategy contributed to its performance?

The active management strategy with diverse investments across continents and asset classes has enabled the CPP fund to outperform most major indexes.

What commitment has the CPP fund made regarding sustainability?

The CPP fund has committed its portfolio and operations to achieve Net Zero by 2050 and has made progress towards this goal, including achieving carbon neutrality in its global operations.

Can you provide examples of recent investments made by the CPP fund?

Recent investments include Era Energy in California, D1, a discount grocery chain in Colombia, and a joint venture in the European Hospitality sector with the acquisition of the W Rome hotel in Italy.

What are the guiding principles of the CPP fund's team?

The guiding principles of the team are integrity, partnership, and high performance.

What is the outlook for the CPP fund in terms of market volatility and returns?

The outlook suggests that market volatility will continue and returns may be lower than in past years, but the CPP fund is built to navigate through such conditions and perform well in challenging economic cycles.